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The rapid spread of the covid new crown epidemic makes it difficult for China to promote the resumption of work and production

A store selling funeral supplies in Chengdu, Sichuan, during the outbreak of the epidemic in China. (28 December 2022)
A store selling funeral supplies in Chengdu, Sichuan, during the outbreak of the epidemic in China. (28 December 2022)

WASHINGTON — With China’s coronavirus policy shift, the Chinese government is returning its focus to economic growth. In an effort to reduce the surging infections hit China’s domestic economy, in some cities, coronavirus-positive workers were told they could return to work, even though that could accelerate the spread of the epidemic.

Industrial production in China is contracting further as severe Covid-related restrictions disrupt factory activity and supply chains. According to data released by China’s National Bureau of Statistics on Tuesday (December 27), the total profit of industrial enterprises above the designated size in the country fell 3.6% year-on-year to 7.7 trillion yuan ($1.11 trillion) from January to November.

While China abandoned some of its strict pandemic restrictions in early December and announced on Monday (Dec. 26) that it would resume customs clearance in January, the recovery of domestic productivity is under pressure. A large part of China’s population is infected or at risk of contracting the new coronavirus and has difficulty working during the recovery period. According to a Reuters survey last week, business confidence in China has fallen to its lowest level since January 2013.

Maximize the resumption of work and production

At its annual economic meeting, which ended in the middle of this month, China’s top leader pledged in a statement to step up policy adjustments in support of a slowing economy and said stabilizing economic growth was a top priority for 2023. With a major shift in central policy, the focus of local governments is shifting from containing the virus back to economic growth.

In order to maximize the resumption of work and production, Beijing, Zhejiang, Chongqing, Anhui, and Guiyang have recently said that patients infected with new coronavirus infections who are asymptomatic or mildly symptomatic will return to work to keep the economy running.

The pandemic has created shortages of grassroots workers in industries such as healthcare, logistics, and supermarkets. The city of Hangzhou, China’s tech hub, issued a notice last week urging leisure citizens to participate in takeaway delivery.

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These tactics reflect the difficulties officials face in trying to revive the economy. In the first three quarters of this year, China’s economy grew by only 3%, and it is basically impossible to meet the annual growth target of 5.5%.

Louise Loo, a China economist at Oxford Economics, told the media: “An orderly reopening can produce a 0.8 percentage point boost to gross domestic product, which is smaller than the boost we have seen in the reopening experience of other East Asian economies, given the relative lack of pent-up demand from Chinese consumers.”

Louise continued: “A disorderly reopening, i.e. easing too quickly and prematurely, will pose a downside risk to this (boosted) outlook.” ”

China’s abrupt shift from “zero” to coexistence with the virus poses a serious challenge to the manufacturing industry. In contrast to most white-collar jobs, which can work from home, workers must travel to factories to complete manufacturing and assembly.

According to the Caixin China Manufacturing Purchasing Managers’ Index (PMI), China’s manufacturing boom continued to be in contraction territory in November due to the inability of factories to operate at full capacity due to the epidemic and prevention and control measures, and China’s manufacturing activity has contracted for four consecutive months.

Some factories are adopting “closed-loop” production systems, where workers eat and live in the factory, minimizing the possibility of workers going out to contract the coronavirus. Some factories have taken this approach to keep their production lines running during the coronavirus outbreak and lockdown.

Some factories try to extend shifts to compensate for the loss of production caused by workers’ leave. Bloomberg reported last week that German automaker Volkswagen AG required workers at its Foshan plant in Guangdong province to work two shifts of 11 hours per 11-hour shift after too many workers took time off from work due to coronavirus infection.

There are also factories that have completely liberalized controls and allowed workers infected with the new crown to continue to work. According to the Wall Street Journal, citing staff, Tesla’s Shanghai factory has no longer mandated thousands of workers to take new crown tests, but instead, workers voluntarily test and report positive results.

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Domestic Chinese media reported on Wednesday that some assembly line workers at Foxconn’s Zhengzhou plant generally continued to work after contracting the coronavirus. Due to the epidemic and the Spring Festival, many workers have left recently, and in order to allow more employees to stay, Foxconn issued a full attendance bonus and a retention bonus and prepared an isolation dormitory for the infected.

The report quoted a Foxconn worker as saying: “I haven’t taken leave, I have a fever in the first half of the night, and I received medicine in the workshop in the second half of the night.” Another worker working on the assembly line of Pegatron Electronics Factory in Shanghai said: “The line leader has ibuprofen in his pocket, who is uncomfortable to give to whom.”

Over the past three years, China’s lockdown policies have caused supply chain disruptions, and global manufacturers like Foxconn are moving more production to India and Vietnam. There are reports that a letter from Foxconn founder Terry Gou played a key role in persuading Chinese executives to speed up and cancel the zero-crown policy.

China’s state-owned enterprises are also abandoning closed operations and returning to full-scale production. China’s state-run Beijing News reported on Tuesday that Beijing has fully promoted the resumption of work and production since Dec. 19, with 42 municipal state-owned enterprises now taking the lead in resuming work.

At the cost of health

However, this drive for economic growth comes at a cost, and allowing positive workers to continue to work runs the risk of further spreading the virus. Since the lifting of coronavirus restrictions earlier this month, coronavirus cases across China have exploded, with widespread shortages of medicines and the healthcare system already overwhelmed.

According to analyst firm Airfinity, China may currently have as many as 1 million coronavirus infections and 5,000 coronavirus deaths per day. And things could get worse. Airfinity says the number of cases per day could reach 4.2 million by March next year.

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Another study by the University of Macau and Harvard Medical School showed that as many as 1.5 million people could die from the coronavirus in the next six months, compared to less than 200,000 due to China’s failure to prepare its population for coexistence with the coronavirus, including increasing vaccination rates and securing drug supplies.

Some foreign companies in China, while agreeing with the direction of China’s reopening, are concerned about the current chaos and the resulting uncertainty about the business outlook.

The US-China Business Council, a lobbying organization representing more than 200 U.S. businesses operating in China, told the media: “Our members’ top priority is the health and well-being of their employees and their families. For a period of time, the absence of employees will temporarily affect productivity. ”

The EU Chamber of Commerce in China told the media in a statement: “Given the pace of policy changes in China, members have so far had little time to respond to China’s new approach to the pandemic. Now, members plan to continue their general business despite the increase in cases, but this is not an easy task. ”

Many in China are also unhappy with the government’s coronavirus policy shift and demand a speedy resumption of work and production, a decision that drives economic growth at the expense of people’s lives and health.

“As long as no one dies, the company has to go to work regardless of whether sheep (yang) or sheep (yang),” wrote one user on Weibo, a Chinese social media company.

Others worry that taking time off will lead to complete job losses, especially as China’s weak economy over the past few years has decimated household incomes.

One Weibo user wrote: “The complaint sounds good unless you don’t want to do it, who dares to complain?” The state reassigns my jobs? ”

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