Road to recovery: lessons from China

With many provinces in China having now lifted their lockdown measures – including Hubei province where the novel coronavirus outbreak originated – the country is trying to restart its economy. What can the UK learn from China, about how its business community has started to return to work and adapted to survive? This article takes a look at some of China’s first steps towards normality, with insights from the CBI’s China team in Beijing and the British Ambassador to China, Dame Barbara Woodward.  

How are workplaces reopening? 

Many businesses in China are operating on a rota basis which sees a maximum of half the staff in the workplace at any one time, allowing social distancing to be maintained. To help limit the potential spread of coronavirus, employees must wear a face mask at all times; businesses must provide hand sanitiser for employees; regular hand-washing is encouraged; and all workplaces must be disinfected every two hours. Despite all of these precautions, businesses continue to comment on issues with staff morale, productivity and attendance. Having been in lockdown for some time, staff are concerned about leaving home for a prolonged period of time, using public transport, interacting with others outside of their ‘bubble’, and possible transmission through air conditioning and ventilation systems.  

In addition to these measures, those working in office blocks must scan a QR code on an app on their phone which will alert the building’s management company if that employee has travelled from a high-risk area. This is a relaxation of a previous measure during the ‘control period’ which saw tenant companies having to provide travel histories and daily temperatures of staff to their block management company, however regular temperature checks – such as when entering or leaving your residential compound – are still in place. 

Workplaces in China that wanted to re-open had to apply to do so by completing a form outlining how they would enforce social distancing and increased cleaning routines – in some instances that form runs to 40 pages long and was very time consuming. So whilst the UK may well expect businesses to take similar actions such as limiting the number of staff in workplaces via a rota system to protect the health of the workforce, consideration should also be given to the bureaucratic burden any steps place on businesses. 

What about the commute? 

Whilst public transport systems in China have resumed, care is still being taken to ensure users maintain social distancing. Commuters who travel to work by subway are required to book on to a particular train – like you would for a National Rail service – so capacities can be set on each train, and those on-board can spread out. This means that subway services are running at approximately 50% of usual capacity. 

The main method of getting to work in China at the moment is private cars – for those who have them - with road traffic returning to about 70% of normal levels. However, buses in China are much less busy than they would normally be, as many of the migrant workers - who tend to be the predominant passengers - are unable to return to work. 

Getting the economy moving again requires people to move again, and if those people don’t live and work in the same area, but you have restrictions on moving between provinces – as China has done – then it can make the restart even more challenging. Beijing and Tianjin are only 30 minutes apart by train, so this is a popular commuter route, but until recently workers were prohibited from moving between the two cities as they are in different provinces. This is not just a problem for people but also for goods - moving goods between provinces is difficult as the transport is stopped on the provincial boundaries and drivers are not always allowed to continue, even if they have a permit for the journey. 

The key learning from this is that easing restrictions region-by-region rather than on a nationwide basis can cause issues. To restrict movement across county lines, or from one local authority area to another, could hamper efforts to get people back to work, especially in London where a large percentage of the workforce commutes from outside the capital. 

Business case studies: what can we learn? 

As has been the case in the UK, many businesses in China have had to consider how they operate and whether there are changes they can make to their normal business function in order to continue generating income. 

Some businesses have moved their operations and business focus entirely online. We heard from a small Beijing-based travel and tourism company who made the decision to cancel their contracts with on-the-ground tour providers and sought to re-orientate their business as a data company, seeking new contracts with companies looking for data on consumer behaviour within the industry.  

In another example, companies with increased demand are ‘loaning’ employees from companies with decreased demand. The Chinese e-commerce giant Alibaba and popular restaurant chain XiBei entered into an employee-sharing partnership. The restaurant chain, finding that it no longer had customers as a result of the lockdown measures, suddenly had too many staff and no revenue with which to pay them. Conversely, Alibaba had too many orders for online groceries but not enough staff to pack them. XiBei agreed to ‘loan’ Alibaba staff to meet demand, with the loaned staff on the Alibaba payroll, keeping them in employment.  

International companies are using the lessons they learned from China to shape their processes – and expectations – for the return to work elsewhere, such as in the UK. One British architecture firm we spoke to have established social distancing in their China office, as per government guidelines, but have also found that many of their employees don’t want to take risks anyway; such as not hot-desking, not using communal spaces such as canteens, and only using bathrooms when they are empty. The firm predicts that once their UK office does reopen only around 20% of the workforce are likely to be in the office at any one time. Even a month after restrictions were lifted in China, they found that they were still nowhere near normal levels of staff in the office. 

Delays in the supply chain 

The economic restart in China has also moved at a slower pace than hoped due to issues with international supply chains. As China was the first country to move through the epidemic, it is in a position to restart much sooner than other countries who are only just at the peak such as countries in Europe or the US. As each country moves through the crisis at different times and different speeds, with varying restrictions on both production and purchasing, it complicates the flows of trade around the world. As one country’s supply chain comes online again, demand in another country may still be supressed; so whilst factories in China may now be in a position to resume production, shops in Europe are not open to buy and sell the goods. However, is likely to be less of an issue for the UK when manufacturing and production resume in earnest here, as more of our trading partners will have also reopened for business than is currently the case for China. Regardless, consideration should be given to the additional time it might take to produce goods, owing to delays in the supply chain, as well as the speed at which consumer activity increases thereby increasing demand. 

Retail, leisure and hospitality businesses may take longer to bounce back 

The retail, leisure and hospitality industries have been amongst the hardest hit in every country which has brought in ‘lockdown’ measures, and China was no exception. However, cafes and restaurants have been able to provide contactless takeaways for the duration of the control period and are now seeing a further relaxation of restrictions on their trade. Customers can now eat-in at many cafes and restaurants, but with a maximum of two customers per table, and at least 1.5 metres separating each table. Unfortunately, the relaxation of control measures has not been as successful across the retail, leisure and hospitality sectors. In Shanghai, some cinemas were re-opened in late March to try and get back to a ‘new normal’ but were swiftly closed a week later due to fears they could foster the spread of the virus.