China struggles to get back to work

China struggles to get back to work

Beijing decided over the weekend against officially extending the Lunar New Year holidays for another week. However, today was marked by a muted return to work in the world’s most populous nation with many conglomerates deciding to keep their factories shut for the time being, and tens of millions of workers being told to work from home.

Beijing’s metro system, by way of example, had less than half the normal passengers it would expect on a typical Monday.

There are many reports of factories remaining closed in China, with some municipalities urging companies to down tools for the rest of this month. The province of Hubei, where the virus started, remains in complete lockdown.

The number of confirmed coronavirus cases has passed 40,000 with the number of deaths surpassing the SARS total of 2003 and on track to hit 1,000 people later this week.

Morgan Stanley wrote in a report on Monday morning: “It’s uncertain whether factories could resume production this week amid local quarantine efforts and traffic controls. Indeed, many authorities and enterprises at local levels are targeting Feb. 17th or later to restart business, and the resumption is likely to be a phased approach.”

Peter Sand, BIMCO’s chief shipping market analyst, warned last week that an extended shutdown of China will temporarily cripple the shipping markets and hit hard on freight rates.

“Every week that China remains closed will mark a slowdown of economic growth,” Sand said.

In Guangdong province, there has been no official notice on when factories should reopen. Many localities, instead, are urging companies to stay shut until March 1.

Police of the Huangpu district in the city of Zhongshan, home to many IT suppliers, posted on their WeChat social media account that companies should not resume work before March without permission.

Samsung Electronics has said it plans to restart production at its TV factory in Tianjin in northeast China on February 17, the same date automotive giants Hyundai, Kia, Toyota and BMW have suggested they will reopen their plants in China.

Several cities including Hangzhou, Zhengzhou, Tianjin, Guangzhou and Shenzhen, homes to many large scale manufacturers, have all released similar guidelines for companies and factories to resume work.

The guidelines have advised companies to resume work in different batches. Companies with complete local supply chains are allowed to resume work as of today while companies with large scale operations have to file applications with the authorities before they can resume work.

Jason Jiang

Jason is one of the most prolific writers on the diverse China shipping & logistics industry and his access to the major maritime players with business in China has proved an invaluable source of exclusives. Having been working at Asia Shipping Media since inception, Jason is the chief correspondent of Splash and associate editor of Maritime CEO magazine. Previously he had written for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week.

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