Via the South China Morning Post: China faces dilemma as it tries to get back to work amid coronavirus fears. Excerpt:
China is facing a dilemma as it tries to get back to business after the extended Lunar New Year holiday amid fears that a mass movement of workers across the country will worsen the spread of the deadly coronavirus that has struck nearly 30,000 people.
Allowing the workforce to return to their jobs was crucial both for sustaining economic growth and providing support to fight the outbreak, according to Lu Zhengwei, chief economist at the Industrial Bank in Shanghai.
“It’s obviously desirable for employers who are now paying rent, salaries and social welfare for their employees, for nothing in return,” he said, adding that most small and medium enterprises in China could only last about a month in the current situation.
After the State Council, China’s cabinet, issued a directive to extend the holiday until last weekend as part of measures to contain the virus outbreak, a number of provinces and municipalities – including Beijing, Shanghai, Zhejiang and Guangdong – pushed back the return to work to this Monday.
That extended hiatus of business operations will have an impact on the country’s economy, which has already been battered by the protracted trade war with the United States.
Advisory firm Oxford Economics has lowered its growth outlook for China to 5.4 per cent in 2020, compared with 6 per cent previously, according to its chief Asia economist Louis Kuijs.
Tao Wang, China economist at UBS, meanwhile forecast the country’s first-quarter growth at 3.8 per cent, and 5.4 per cent for the whole year.
Lu, the economist with Industrial Bank, said getting people back to work soon was crucial to support efforts to contain the outbreak.
“The supply of masks, protective suits and disinfectant will all depend on having more workers getting back to work, as will the emptying shelves in supermarkets,” he said.
