Managing Your China Business During the Coronavirus Outbreak

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(This article was originally published on January 27, 2020 and was last updated on April 30. For all coronavirus updates in China starting May 1, 2020 as well as our related business advisory content, see here.)

Coronavirus updates

  • Due to the COVID-19 pandemic, countries worldwide, including China, have implemented travel restriction policies that have prevented the return of foreign nationals to the workforce. As a result, there will be significant changes to the residence days for the tax year 2020 for many expats who work in China. We discuss the new individual income tax (IIT) liabilities here: How to Determine Your Foreign Employees’ IIT Liability in China: COVID-19 Travel Ban Series.
  • More Hong Kong enterprises with cross-border operations in mainland China are now eligible to apply for an exemption from the usual compulsory quarantine requirements. Previously, this was restricted to essential industries, such as medical and food supply. There are clear qualification criteria set by the Hong Kong Trade and Industry Department, responsible for the application process. The expanded quarantine exemption will expire June 7, 2020. To learn more, read our article here: Quarantine Exemptions Expanded, Extended for Hong Kong Enterprises with Cross-Border Operations.
  • To counter investor concerns and make doing business in China more competitive, Beijing is focusing on developing its Western Regions – Chongqing Municipality, Sichuan, Guizhou, Guangxi, Yunnan, Tibet, Gansu, Qinghai, Ningxia, Shaanxi, Inner Mongolia, and Xinjiang, as well as regions and cities in other provinces, such as Xiangxi, Enshi, Yanbian, and Ganzhou.
    Starting January 1, 2021, enterprises will pay a lower CIT rate of 15 percent – if they make investments in encouraged industries in China’s western regions from January 1, 2021 to December 31, 2030. This includes foreign invested companies. (China’s standard corporate income tax rate is 25 percent. In comparison, CIT in Vietnam is 20 percent.) To learn more, read our latest article here: China Introduces 15% Profits Tax to Qualifying Investors in its Western Regions. We have provided a complimentary English language, PDF copy of the Catalogue of Industries Encouraged to Develop in the Western Region here: Catalogue of Industries Encouraged to Develop in the Western Region.
  • The Chinese government recently introduced measures to support the new energy vehicle (NEV) industry – electric vehicles, plug-in hybrid vehicles, and fuel cell vehicles – which was hit hard by the coronavirus outbreak. The measures include the extension of tax exemptions as well as the continuation of subsidies, although the subsidy amounts have reduced. Read more: Incentives for China’s New Energy Vehicles Industry.
  • For all coronavirus updates in China and Hong Kong starting May 1, 2020 as well as related business advisory content, follow our coverage here Managing Your China Business During the Coronavirus Outbreak: Ongoing Updates.
  • Our latest business coverage on the impact of COVID-19 on China Briefing addresses some common concerns regarding expatriate work and residence permits in China due to the country’s sudden travel restrictions. Read it here: China’s COVID-19 Travel Ban: How to Handle Your Foreign Employee’s Work and Residence Permit.
  • China has announced that it will reopen the Forbidden City on May 1, Friday – 3 months after it was shut down due to the coronavirus outbreak. The move is the clearest signal that Beijing believes it has brought the disease under control. The Palace Museum, which manages the Forbidden City, has imposed a daily limit of 5,000 visitors. Prior to the outbreak, this limit was 80,000.
    Visitors will need to wear masks, show their health codes, accept temperature checks, and maintain a one-meter distance from each other. The popular tourist destination saw 2,500 tickets booked within a half hour of the announcement – according to the website that manages its ticketing. This is not surprising as China begins a five-day public holiday, starting tomorrow, May 1.
  • April 30 – China reported 4 newly confirmed cases, all of which were imported from abroad; no new deaths.
  • The annual general assembly session of the National People’s Congress (NPC), China’s parliament, will begin May 22. Beijing announced the decision by the NPC’s Standing Committee on Wednesday, as reported by the state news agency Xinhua. Around 3,000 lawmakers are expected to gather. Meanwhile, the Chinese People’s Political Consultative Conference, the country’s top political consultative body, will start its annual session on May 21.
    The decision is a major show of confidence that China has the outbreak under control and all eyes will be on how Beijing will manage the Two Sessions, including impact on travel and hosting of large numbers of people from across the country.
  • April 29 – China reported 22 newly diagnosed cases, of which 21 were imported cases and 1 was a local case (1 case in Guangdong). There were also 26 new cases of asymptomatic infections. Imported cases involving travelers from abroad and managing asymptomatic infections appear to be persistent concerns for China, whose economic reopening is being closely observed by other countries also fighting the outbreak and planning for resumption of work / end to lockdowns.
  • China Briefing’s coverage of the impact of COVID-19 on businesses and solutions to adapt to changes in the economy continues.
    We provide the most updated table detailing China’s provincial quarantine policies for inbound travelers (as of April 28, 2020) here: China’s Travel Restrictions due to COVID-19: An Explainer.
    In the face of the ongoing pandemic, we discuss nine ways employers can legally reduce their labor costs in China here: How to Legally Reduce Labor Costs in China During the Coronavirus Outbreak.
  • April 28 – China reported 6 new cases today: 3 were imported cases and 3 were local cases (3 cases in Heilongjiang). There were no new deaths. 40 new cases of asymptomatic infections were reported. (Daily bulletin in Chinese here.)
  • China is gradually returning to normal even as it prepares against possibility of a second wave of the outbreak. Beijing has announced new regulations that include requiring residents to practice good behavior, such as covering their mouth and nose when coughing or sneezing, not eating on public transport, and wearing a mask in public if sick. Restaurants will also be required to provide serving utensils and avoid sharing portions, when possible. The regulations come into force on June 1.
  • April 27 – China’s National Health Commission reported just 3 cases as of April 26, Sunday: 2 were imported cases and 1 was a local case (1 case in Heilongjiang). No new deaths were reported. Meanwhile, Wuhan, capital of Hubei province – and where the pandemic originated – has discharged all of its coronavirus patients.
  • We have updated our article covering the latest updates on travel policies across China, including new restrictions introduced in northeast China, the country’s color-coded health monitoring scheme, identification of new risk areas, and other micro-control measures. You can read the updated version here – China’s Travel Restrictions due to COVID-19: An Explainer.
  • April 24 – China reporting low numbers again today in its daily bulletin released by the National Health Commission: 6 new cases out of which 2 were imported and 4 were local (3 in Heilongjiang province, 1 in Guangdong province). This is the seventh consecutive day with no deaths reported on the mainland. (See the official bulletin in Chinese here.) There were 34 new cases of asymptomatic infections recorded.
  • To combat the economic fallout of COVID-19, the Hong Kong SAR government announced a set of new enhanced terms for the 80 percent, 90 percent, and special 100 percent guarantee loans for small and medium enterprises (SMEs). Under the Enhanced 100 Percent Loan Guarantee Scheme, the guarantee commitment has been increased to HK$50 billion (US$6.5 billion). Eligible SMEs will receive a maximum loan amount of HK$4 million (US$520,000) and can benefit from the principal moratorium arrangement for the first 12 months. We explain the loan schemes here: Hong Kong’s New SME Financing Guarantee Scheme: An Explainer.
  • April 23 – China reported ten new coronavirus cases today, of which 6 were imported cases and 4 were local (3 cases in Heilongjiang, 1 in Guangdong). For six days in a row now  there have been no new deaths reported. The National Health Commission reported 27 new asymptomatic cases. There are currently 959 active cases in total, including 63 in critical condition. (See Thursday’s Chinese official bulletin here.)
  • Citing state media sources, Reuters is reporting that Harbin, the provincial capital of Heilongjiang, is banning entry of non locals and out of area vehicles. The province now has the largest outbreak of coronavirus cases, mainly involving travelers from across the Russian border or coming in from epidemic areas abroad. Earlier this month, Harbin announced there would be “28 days of quarantine for all arrivals from abroad, with two nucleic acid tests and an antibody test for each. It also set 14-day lockdowns for residences where confirmed and asymptomatic cases are found.”
  • April 22 – China reported 30 new coronavirus cases on Wednesday morning – 23 of which were imported involving travelers from overseas (up from 11 the day before).
    Asymptomatic cases rose to 42 from 37 a day earlier, according to the National Health Commission (see here for the official daily bulletin).
    Thus far, mainland China has reported a total of 82,788 cases of COVID-19. No new deaths were reported, which keeps the death toll at 4,632.
  • April 21 – According to China’s National Health Commission’s Tuesday’s bulletin report: 11 new infections were confirmed on Monday, out of which 4 were imported. The 7 local cases were recorded in Heilongjiang (6), the northeast province bordering Russia, and Guangdong (1) province. (Tuesday’s official update in Chinese here.) There were 0 new deaths reported Monday; the total number of cases in mainland China is at 82,758 and the death toll remains 4,632. China also reported 37 new asymptomatic coronavirus cases, down from 49 on Sunday.
    Reuters note that areas considered to be at medium-risk in China include two districts in Harbin, the city of Suifenhe in Heilongjiang, two districts in the southern city of Guangzhou, and Jiaozhou city in eastern Shandong province.
  • China is currently implementing Wuhan-type strict lockdown measures in the city of Suifenhe, Heilongjiang province, where at least 2,000 Chinese nationals crossed over from Russia until the border checkpoint was closed April 7. Suifenhe City, with a local population of about 70,000, is now a new COVID-19 hotspot in ChinaThe Guardian reported over the weekend that “a total of 346 Chinese nationals returning from Moscow through Suifenhe contracted COVID-19”according to a statement from the Chinese consulate in Vladivostok on Thursday.
    Reuters reported Sunday, April 19, that most of the locally transmitted cases in Heilongjiang province, were related to one imported case in the capital, Harbin. On Friday, April 17, “18 officials in Harbin, including a vice mayor, were punished”, according to the news agency.
  • The latest article in our ongoing coverage of new business opportunities in China in the aftermath of the coronavirus looks at changing preferences and investment opportunities in the country’s fresh food and meat industry, including cold chain, e-commerce, and technology. Read it here – How COVID-19 Will Transform the Fresh Food Industry in China.
  • We have updated our COVID-19 policy tracker here – China’s Support Policies for Businesses Under COVID-19: A Comprehensive List and our article outlining how businesses can use these preferential policies, including foreign investors here – How to Use China’s Preferential Policies Rolled Out amid COVID-19.
  • April 20 – According to China’s National Health Commission Monday update (here in Chinese), 12 new cases were recorded yesterday, out of which 8 were imported; 16 cases were recorded on Saturday, out of which 9 were imported. The 4 cases of local infection on Sunday were recorded in the northeastern border province of Heilongjiang (3) and Inner Mongolia (1).
    The health commission also reported that 49 new asymptomatic coronavirus cases (5 of which were imported) were recorded on April 19 on the mainland, compared to 44 on Saturday.
    As per reporting from Reuters, as of the end of April 19, mainland China has an accumulated total of 82,747 cases and 4,632 deaths.
  • Wuhan deaths revised – the death toll has been raised by 1,300 or 50 percent, from 2,579 to 3,869. The Guardian reports: Wuhan’s taskforce on virus prevention and control explains the sudden change in reporting is not due to a cover up but the fact that a “number of patients had died at home before reaching hospital, as well as late and inaccurate reporting”. The revised death toll is thus a rectified number.
  • April 17 – China reported 26 newly confirmed cases, of which 15 were imported from abroad and 11 were local (5 in Guangdong, 3 in Heilongjiang, 2 in Shandong, and 1 in Liaoning). No new death was recorded yesterday. (Official update in Chinese here.) So far, a total of 3,342 deaths and 82,367 confirmed cases have been reported, according to the Friday briefing from the National Health Commission.
    There were 66 new cases of asymptomatic infection, including 3 cases of asymptomatic infection imported from abroad.
  • We write about Hong Kong’s latest stimulus measures to help ailing businesses stay afloat and support individuals seeking job security. This will be the third and largest stimulus package rolled out by the Hong Kong government this year, following the first round epidemic fund of HK$30 billion (US$4 billion), and the HK$120 billion (US$15.5 billion) worth of relief measures introduced in the Hong Kong 2020-2021 Budget. You can read it here – Hong Kong Unveils Anti-Epidemic Fund 2.0: Support for Businesses, Job Retention.
  • April 16 – China reported 46 newly confirmed cases on Thursday, of which 34 cases involved travelers arriving from overseas, and 12 were locally transmitted (5 in Guangdong, 4 in Heilongjiang, and 3 in Beijing). No death was recorded yesterday. China’s capital reported local infections for the first time since March 23. (See official update in Chinese here.) The National Health Commission also reported 64 new asymptomatic infections, including 3 cases imported from abroad. A total of 3,342 deaths and 82,341 confirmed cases have been reported until now.
  • April 15 – The National Health Commission reported on Wednesday that China had 46 newly diagnosed cases, of which 36 were imported and 10 were local (8 in Heilongjiang, 2 in Guangdong). This is a decline in new confirmed cases on the mainland from the 89 new cases reported the day before. However, an increasing number of local transmissions in the far northeast province of Heilongjiang, which borders Russia remains a concern for authorities. 57 new cases of asymptomatic infections were also reported. 1 new death was reported in Hubei.
  • Chinese state media Xinhua reported Tuesday that the country is conducting early-stage human testing for two experimental vaccines targeting the COVID-19 coronavirus, developed by the Beijing unit of Sinovac Biotech (listed on Nasdaq) and the Wuhan Institute of Biological Products; the latter is an affiliate of state-owned China National Pharmaceutical Group. Previously, in March, China greenlit a clinical trial for another potential coronavirus vaccine developed by China’s Academy of Military Medical Sciences and Hong Kong-listed biotech firm CanSino Bio.
  • April 14 – China’s National Health Commission reported 89 new coronavirus infections on Tuesday (see official update in Chinese here). Of these, 86 cases were imported and 3 were local (Guangdong). No new deaths were reported. 3 new suspected cases were reported (2 in Shanghai and 1 in Inner Mongolia). As of the end of April 13, a total of 82,249 confirmed cases were reported by China.
    There were 54 new cases of asymptomatic infections reported, including 5 cases of asymptomatic infections imported from abroad.
  • April 13 – China’s imported infections are rapidly growing. On Saturday, the National Health Commission reported 99 cases (double the 46 on Friday).
    On Sunday, there were 108 infections reported (see official update in Chinese here), 2 new deaths in Wuhan – the epicenter of the outbreak, and 6 new suspected cases – all of which were imported (4 in Heilongjiang province and 2 in Shanghai).
    Sunday’s figures are the highest reported in over five weeks in China. 98 of the 108 confirmed infections were imported, including 7 local cases in Heilongjiang province that is emerging as a hotspot of imported infections due to people traveling from across the Russian border.
    Chinese authorities are scaling up restrictions – reminiscent of the Wuhan lockdown – on movement and travel in parts of Heilongjiang province, particularly its capital, Harbin, and the border city of Suifenhe. According to The Guardian, “Suifenhe was one of the few routes for people to return to China from Russia after Russia stopped all flights and closed its land border to incoming traffic in late January and early February.”
    All new arrivals to Harbin and Suifenhe City will undergo testing and be under quarantine for 28 days. In Harbin, residential areas where COVID-19 cases have been confirmed (both asymptomatic and people showing symptoms) will be locked down for 14 days.
  • April 10 – After two consecutive days of increases in the number of confirmed cases (almost all of which have been imported), China’s National Health Commission reported a dip today – 42 newly confirmed cases, out of which 38 were imported and 4 were local (3 in Guangdong and 1 in Heilongjiang). 47 new asymptomatic patients were infected, including 14 imported asymptomatic patients. There was 1 new death recorded yesterday (in Hubei province). There are currently 733 confirmed cases (including 34 severe cases) imported from abroad. No death yet recorded from imported cases. China has now reported a total of 3,336 deaths and 81,907 confirmed cases. (See the official update here in Chinese.)
  • April 9 – China reported 63 new confirmed cases today (61 imported, 2 locally transmitted in Guangdong province) and 2 new deaths. This brings the total to 81,865 confirmed cases and 3,335 deaths. Currently, 729 confirmed cases have been recorded as imported from abroad, bringing the total to 1,103 imported cases. No death has been reported from imported cases. The National Health Commission also reported 56 new cases of asymptomatic infection, among which, 28 cases were imported from abroad. (See latest briefing here in Chinese.)
  • Some numbers here from the capital, Beijing, and business center, Shanghai. According to data collected from AliHealth under Alipay – as of April 8:
    a) Beijing has 125 existing confirmed cases. A total of 588 infections and 8 deaths have been found in Beijing since the outbreak. Of them, 455 have been cured. (Official link from today in Chinese here.)
    b) Shanghai has 130 existing confirmed cases. A total of 543 infections and 7 deaths have been found in Shanghai since the outbreak. Of them, 406 have been cured. (Official link from today in Chinese here, stating that a total of 417 cases were cured and discharged.)
  • The latest update from China’s National Health Commission (in Chinese here) states that new confirmed cases rose to 62 yesterday, the highest since March 25. Imported infections accounted for 59 of these cases; the three local cases were in Shandong province (2) and Guangdong province (1).
  • One-third of the imported infections in April are from Russia. Reuters reports that Suifenhe City in Heilongjiang province, which shares its border with Russia, has begun to restrict the movement of its citizens like in Wuhan. Imported cases reported in the northern Chinese province on April 7 were at 25, a daily high. “Residents must stay in residential compounds and one person from a family can leave once every three days to buy necessities and must return on the same day, said state-run CCTV.” (See state-owned China Daily article here in Chinese reporting on the official notice on new management orders and restrictions in Suifenhe City triggered from 6am CST, April 8.)
  • According to reporting by Reuters, based on official figures, “over 50,000 people in Wuhan caught the virus, and more than 2,500 of them died, about 80% of all deaths in China”. Wuhan recorded only “three new confirmed infections in the past 21 days and only two new infections in the past fortnight.” Reuters also reports that about 55,000 people are expected to depart Wuhan by train today. Flights have resumed at Wuhan Tianhe airport although routes to Beijing and international destinations have not been restored.
  • April 8 – The unprecedented lockdown on Wuhan, the capital of Hubei province, and epicenter of the COVID-19 outbreak has been lifted today after 11 weeks. The city is now open for business and people can now travel across its border as the first train resumed service Wednesday morning. The Guardian writes, “As of just after midnight Wednesday, the city’s 11 million residents are now permitted to leave without special authorization as long as a mandatory smartphone application powered by a mix of data-tracking and government surveillance shows they are healthy and have not been in recent contact with anyone confirmed to have the virus.” We have written about the travel monitoring and surveillance here.
  • April 7 – As per the National Health Commission’s update for Tuesday (see here in Chinese), China’s latest tally is as follows: 32 new confirmed infections, all imported; 30 new asymptomatic cases; 0 new deaths. This is the first time China is reporting no new deaths since January.
    The tally reported Monday, April 6, saw 39 new confirmed cases and all except 1 were imported and 1 death in Hubei province (see here in Chinese).
    China has now turned its fight against COVID-19 on two fronts – one, limiting exposure to infections from foreign arrivals through stringent travel restrictions and two, by focusing on asymptomatic cases. Since April 4, China’s daily tally has started to include numbers of asymptomatic cases.
    As a result of this, the country is witnessing another round of preventive measures as authorities race to remove any possibility of a COVID-19 rebound. For example, it was reported Monday that 45 residential compounds (out of 7,000) had their epidemic-free status revoked to ensure that lockdown measures would continue due to the presence of asymptomatic infections. The Guardian reports that residents in Wuhan had for the first time been allowed to move outside their residence for up to two hours in a day if they cleared the ‘green health code’. Wuhan was also set to lift its border restrictions starting tomorrow, but it remains to be seen if this plan will go ahead. Wuhan is the epicenter of the COVID-19 outbreak and its first officially identified infections were recorded in December.
  • A reflective, if not slightly sobering, op-ed here from Riccardo Benussi who manages the International Business Advisory division at Dezan Shira & Associates’ Shanghai office on the pervasive impact of COVID-19 on business and economic recovery in China – COVID-19’s Grim Milestones: Impact on Business is Real but Opens Up New Growth Areas. He writes that “several companies are not silently watching – they have adapted like chameleons to the situation and stretched their brand, reshuffled their production lines, and catered to new needs. In short, they have listened to the market and taken a risk or two, making COVID-19 the main propeller for new growth in some sectors and reviving dormant potential in others.” Benussi briefly highlights some of the new opportunities emerging for the taking for foreign investors and industrious enterprises in China during this time.
    Follow our continuing coverage of the business, economic, HR, payroll, regulatory, and tax developments in China as well as ongoing impact of COVID-19 here on China Briefing. (To make it easier, you can obtain a complimentary subscription to China Briefing by registering here.)
    For advisory concerning your China business operations during COVID-19, please contact Dezan Shira & Associates at china@dezshira.com. We are on the ground with 13 China offices and can assist.
  • April 4 also marks the first day of the annual tomb sweeping festival Qingming, when usually millions of Chinese travel to their hometowns to pay respect to their departed relatives and ancestors. This year, Reuters reports that Chinese authorities are instead encouraging people to watch cemetery staff go about their tasks via streaming online as new travel restrictions to prevent internal spread of the virus will likely curb any mass movement for the foreseeable future.
  • China reported 19 new cases on Friday, predominantly those who traveled from abroad.
  • April 4 – China is observing a day of mourning today. A 3-minute silence brought the country to a halt as it struck 10am; people stood in silence, heads bowed in remembrance of those who had lost their lives to COVID-19 and to pay respect to the health workers who died on the frontline as it were. The Guardian reports eloquently: “At 10am Beijing time, citizens paused; cars, trains and ships sounded their horns; and air-raid sirens rang out in memory of the more than 3,000 lives claimed by the virus in China. In Wuhan – the city where the virus first emerged late last year – sirens and horns sounded as people fell silent in the streets. Staff at the Tongji hospital stood outside with heads bowed towards the main building, some in the protective hazmat suits that have become a symbol of the crisis worldwide.”
  • The Guangxi Zhuang Autonomous Region (GZAR), which borders Vietnam, is suspending transport across the border and is controlling the cross-border movement of people over fears of imported cases. Only ports for freight transport have remained open, according to the region’s health commission.
  • April 3 – China reported 31 new confirmed infections today – 29 imported cases and 2 locally transmitted cases (1 in Liaoning province and 1 in Guangdong province). 4 new deaths were reported, all in Wuhan. There were 60 new cases of asymptomatic infection, of which 7 were from abroad. The imported 7 cases were confirmed on the same day. (See the briefing from the National Health Commission here in Chinese.)
    The total cases since the outbreak broke in China is now 81,620 including 3,322 deaths.
  • Wuhan authorities are set to lift travel restrictions on April 8 – but these can be availed only by those showing a ‘green’ health code. The city has also been warned to remain vigilant with residents being advised to stay indoors and practice preventative measures despite the scheduled ease on travel curbs. The reason is fears of a rebound or second wave of the outbreak due to ‘internal and external risks’ as per Wang Zhonglin, Wuhan’s Communist Party Secretary. (We explain the country’s travel restrictions and the “health code” in this article.)
  • There are now more than 1 million confirmed cases of COVID-19 worldwide and more than 51,400 deaths.
  • China has announced that it will be observing Saturday, April 4, as a national day of mourning to pay respect to 14 ‘martyrs’ who died in the fight against the novel coronavirus disease. According to The Guardian, embassies and consulates are expected to fly their flags at half-mast, public entertainment will cease on the day, and there will be a 3-minute silence observed at 10am.
  • April 2 – China reported 35 imported cases and 6 deaths (as of the end of April 1). The National Health Commission also noted in its briefing today that there were 55 new cases of asymptomatic infection, of which 17 cases are from overseas and 9 cases have been confirmed as infected patients. This means that a total of 1,075 asymptomatic infected patients are under medical observation now (226 imported from abroad).
  • China has extended the deadline for tax filing in April from April 20, 2020 to April 24, 2020, nationwide. However, businesses can apply for further extension.
  • Latest from China Briefing – China’s Travel Restrictions due to COVID-19: An Explainer – we provide information on the latest travel policies in China, implemented temporarily due to COVID-19 (and meant to contain any internal spread of the coronavirus), to help business travelers understand the current situation and develop feasible travel plans.
  • April 1 – China’s National Health Commission announced today that 36 new infections were reported yesterday, and 7 deaths. 35 of the new confirmed cases were imported and one new case was recorded in Guangdong province. 130 new asymptomatic cases were recorded Monday, of which two were confirmed as infected patients.
  • As China closes its borders to almost all international travel, many foreign-invested entities will need to manage critical decision making remotely. China Briefing has been writing about the best available cloud-based  services and other IT tools and applications that can facilitate efficient management during a period of crisis like the coronavirus outbreak.
    In our latest article, we gather insights from our in-house experts on key decision making that needs to be done by a company CFO of a China entity at this time, including the implementation of new policies remotely – Firefighting, Cash Flow Management, and Digitization – Short Term Solutions for CFOs.
  • Chinese companies are now reporting a pick-up in economic activity. The country’s composite purchasing managers’ index (PMI) that tracks activity across service sector firms and factories rebounded to 53 in March from a record low of 28.9 in February. A number below the 50 mark would indicate contraction.
    The manufacturing PMI has risen to 52 in March, up from 35.7 in February and the services PMI rose to 52.3, up from 29.6 in February. Since PMI constitutes self-reporting by managers, China’s National Bureau of Statistics is still cautious: “[it] reflects that more than half of the surveyed enterprises have resumed work and resumed production, better than last month, but it does not mean that China’s economic operation has returned to normal.” According to Reuters, “New export orders received by Chinese manufacturers ticked up to 46.4 from 28.7 in February, but were still mired in contraction.” With the pandemic spread widely across Europe and the US, the economic downturn could last awhile longer.
  • March 31 – It has been one week since Wuhan, epicenter of the outbreak, confirmed a new locally transmitted case. In its latest briefing, the National Health Commission noted 48 new cases on the mainland, all of which were imported. There was one death reported, in Hubei province, on March 30.
  • March 30 – Yesterday, China reported 31 new cases, 30 of which were imported. The only locally transmitted case was in Gansu province. This brings the total number of imported cases to 723. The March 29 briefing from China’s National Health Commission can be accessed here (in Chinese). Until Sunday, March 29, there were a total of 81,470 confirmed cases and 3,304 deaths.
  • China has been surpassed by Italy and the US in terms of the highest number of infections as the rest of world combats the spread of the COVID-19 pandemic. China is gradually reopening although experts warn against relaxing precautionary restrictions just yet. On Friday, the country’s Film Bureau announced that all cinemas needed to close immediately despite having plans in place to air popular films to attract audiences so that venues could recoup some of the lost profits with directors and producers waiving their right to their cut of the revenue. No reason was given but its likely due to fears of a possible second wave of the virus breaking out. Some 600 out of 70,000 cinemas had reopened in the last two weeks, although to very little business.
  • China’s closure of its borders to all foreign arrivals has an immediate and urgent impact on foreign investors business operations during COVID-19. We look at appointing temporary China General Managers and Legally Responsible Persons, and how to cater for legal issues, HR, and financial management in China by sub-contracting that work to professional firms on the ground – China Business Continuity Issues That Need to Be Put in Place Now.
  • March 27 – Mainland China has reported its first locally transmitted coronavirus infection in three days – in Zhejiang Province. Cases involving overseas travelers are still dominating the total number of new cases and explains China’s decision to immediately close its borders.
    At its briefing on Friday, the National Health Commission reported that 55 new cases were confirmed yesterday – 54 were imported – and 5 new deaths. This brings the total number of infections in mainland China to 81,340 and the death toll to 3,292.
  • China is temporarily banning foreigners from entering the country. The Chinese Foreign Ministry said it was “suspending the entry of foreign nationals” because of the “rapid spread of Covid-19 across the world”. According to the BBC, the suspension will apply to foreigners even if they hold visas and residence passes, but not to diplomats or those with C visas (usually aircraft crew). People with “emergency humanitarian needs” or those working in certain fields can apply for exceptions.
  • We have updated our COVID-19 Policy Tracker that lists out the Chinese government’s support policies for business enterprises and industries. The updates have been made in categories relating to industry, legal services, tax, trade and investment, and social security as well as Beijing’s SME sector. See here – China’s Support Policies for Businesses Under COVID-19: A Comprehensive List.
  • March 26 – On Wednesday’s briefing, China’s National Health Commission reported 67 new cases imported from overseas: Shanghai (18), Inner Mongolia (12), Guangdong (11), Beijing (6), Fujian (6), Shaanxi (3), Tianjin (2), Xhejiang (2), Jiangsu (2), Yunnan (2), Shanxi (1), Jilin (1), and Henan (1). Wuhan, the epicenter of the outbreak and capital of Hubei Province, recorded no new confirmed case or suspected case, meaning this is the second consecutive day of no locally transmitted cases. The new cases reported from Wednesday are all travelers from abroad and brings the cumulative total to 81,285 confirmed cases in China (in which a total of 541 confirmed cases have been imported).
  • Our in-house experts discuss the best IT solutions available to businesses in China to digitize and optimize work processes as COVID-19 disrupts traditional work models. It is now becoming evident that businesses need to invest in IT tools that will mitigate their exposure to the unpredictable impact of black swan events like the outbreak. In China After COVID-19: How Foreign Companies Can Leverage Key IT Solutions, we discuss scalable, adaptable, and cost-effective tools for virtual workforce collaboration, digital accounting, and expenses management.
  • March 25 – China is reporting a drop in new confirmed infections today as no local transmissions were recorded on Tuesday. On March 24, the number of new cases on the mainland were 47, all imported. This figure is down from Monday, which saw a total of 78 cases (74 imported).
  • March 24 – In its Tuesday briefing, China’s National Health Commission reported 78 new cases of COVID-19, and seven deaths on the mainland. All the deaths were in Hubei province. Among the 78 new cases, four were locally transmitted, including one in Wuhan and three elsewhere. Others were described as imported, including 31 in Beijing, 14 in Guangdong province, 9 in Shanghai, and 5 in Fujian province.
  • Non-residents who were stuck in Wuhan (Hubei province), the epicenter of the outbreak, due to the lockdown, may now apply to leave the city if they have been issued a green health code (via a smartphone app), reports The Guardian. Public transport has resumed and people can now move about their daily tasks or go to work if they are healthy. For instance, people can now shop at grocery stores – they will need to have their health code verified (by the smartphone app), have their temperatures checked, and register their names.
  • Provinces in China are gradually announcing dates for when schools will reopen.
  • March 23 – On Monday, China reported that all its new cases (39) were imported; this is a drop in new figures which had been rising in the last four days. It can be attributed to China’s policy of diverting Beijing-bound traffic and strict measures to check those coming from overseas. Confirmed cases were recorded in Beijing (10), Shanghai (10), Fujian province (6), and Guangdong province (6), Shandong province (2), Gansu province (2), Zhejiang province (1), Henan province (1), and Chongqing (1).
    A total of 81,093 cases have been confirmed so far, according to the National Health Commission; 9 new deaths were recorded on Sunday, bringing the toll to 3,270.
  • March 22 – China has started diverting all Beijing-bound international flights to other airports for thorough screening before allowing them to continue on and disembark in the capital.
    China reported Sunday that it had confirmed its first domestic infection in four days.
  • Beginning March 20, exporters in China will enjoy increased tax rebates for around 1,464 products. In addition, authorities plan to expedite customs channels for key material required for resumption of work and production. Financial institutions have also been encouraged to increase foreign trade loans and credit supply. We cover the latest support measures introduced by China for trading companies here – Trading Businesses in China to Avail Export Tax Rebates, Customs Duty Exemptions.
  • Hubei (where the outbreak began) has still kept its provincial borders closed although some travel restrictions have loosened locally. According to authorities – the quarantine will be lifted only if the region goes 14 days with no new cases.
  • March 20 – China reports no local community transmission for a second consecutive day – all 39 new confirmed cases recorded on Thursday were imported, according to the National Health Commission. The new cases were recorded in Guangdong (14), Shanghai (8), Beijing (6), Fujian (3), and one each in Tianjin, Liaoning, Heilongjiang, Zhejiang, Shandong, Guangxi, Sichuan, and Gansu.
  • According to the state-backed China Daily, the lockdown of Wuhan may likely be lifted if there are no new cases for 14 days. Wuhan is a key manufacturing hub in central China.
  • To help our readers better understand and leverage the new preferential policies rolled out by different levels of Chinese government, our latest article breaks down the policies into five categories – work resumption, tax breaks, social insurance cuts, financial stimulus, and support for special industries and entities. Access it here – How to Use China’s Preferential Policies Rolled Out amid COVID-19. If you have any questions, you may reach out to our team of professionals at China@dezshira.com.
  • The Guardian reports of farewell ceremonies in the capital city Wuhan, Hubei province where the outbreak began, to thank medical workers from Jiangsu province. The challenge is now to combat a possible second wave of infections from people returning from overseas.
  • March 19 – China’s National Health Commission reported Thursday that there were 34 new confirmed cases in the country, but all were imported. In Hubei province, the epicenter of the outbreak, there were no new cases recorded on Wednesday.
  • The number of coronavirus infections around the world has crossed the 200,000 mark, according to tracking by the John Hopkins University Center for Systems Science and Engineering real-time dashboard.
  • China Briefing looks at the reasons why foreign investors in China should take the long-term view when planning their Asia investment strategy. Under the outbreak, China has shown how integral it is to global supply chains, how efficiently it has been able to contain and mitigate infections, and the quick roll-out of tax breaks, incentives, and relaxations for small and medium enterprises. Read more in our latest article – 3 Reasons Foreign Investors Should Stick with China amid the Coronavirus.
  • As of March 18, mainland China has recorded two consecutive days of reporting 1 domestic infection. Also, new cases reported in Hubei province – the epicenter of the outbreak – has been in single digits for the last 7 days.
  • March 18 – As of yesterday, mainland China reported 13 new confirmed cases, a fall from 21 cases reported on Monday. The National Health Commission stated that all the new coronavirus infections but one were imported; the accumulative number of imported cases is 155 now and the total number of confirmed cases is 80,894 as of the commission’s Wednesday update.
    By the end of Tuesday, the total death toll on the mainland reached 3,237, an addition of 11 deaths from the previous day. All new deaths were in Hubei province and all but one in Wuhan.
  • March 17 – The latest briefing from the National Health Commission reports that China had 21 new cases yesterday (1 in Wuhan, Hubei province and 20 imported cases); there are 80,881 accumulative cases of infection and 3,226 deaths.
  • In the latest article from China Briefing, our experts discuss the cloud-based solutions available to businesses in China as work-from-home becomes increasingly the norm after the COVID-19 outbreak. See “COVID-19: Which IT Systems to Deploy to Assist Employees Working from Home“.
  • China boosts face mask production capacity by 450 percent in a month, reports the South China Morning Post – rising from 20 million to 110 million in February with 3,000 new producers entering the market. The article notes that carmakers BYD and SAIC, iPhone assembler Foxconn, and oil company Sinopec are among new entrants in the industry. The National Development and Reform Commission informed that as of Saturday, China’s daily output of face masks reached 116 million units or 12 times the figure reported on February 1.
  • March 16 – The last week has culminated in the dramatic increase of global infections as China’s situation has more or less stabilized. Total deaths inside mainland China stood at 3,208 as of Monday while deaths outside of China rose to 3,241. As of March 15, the National Health Commission reported a total of 9,898 confirmed cases. (16 new confirmed cases and 14 deaths on March 15; 4 confirmed cases in Wuhan, Hubei province and the other 12 from overseas.) See here for the latest update from the commission.
  • March 14 – The rate of local transmission is slowing down in China as per the latest data from the National Health Commission. As of the end of Friday, March 13, the number of new COVID-19 cases brought from overseas had exceeded local infections. Mainland China recorded 11 new confirmed cases on Friday; 7 of these cases were imported. This included 4 in Shanghai, 1 in Beijing, and 2 in Gansu – with travelers coming in from Italy, the US, and Saudi Arabia.
  • We continue to update our China COVID-19 policy tracker – China’s Support Policies for Businesses Under COVID-19: A Comprehensive List – which records the latest policies put out out by China’s central and local governments to shore up the confidence of businesses and ease some of their compliance burdens.
  • March 13 – On Friday, China’s National Health Commission reported that mainland China had 8 new confirmed cases on Thursday, down from 15 cases a day earlier. This brings the total number of confirmed cases in the mainland to 80,813. As of the end of Thursday, the death toll had reached 3,176 with 7 new deaths; Wuhan accounting for all of the fatalities but one. Total number of confirmed coronavirus cases has crossed 128,000 worldwide.
  • Total number of coronavirus cases worldwide stands at 127,748, according to figures from Johns Hopkins University.
  • With COVID-19 spreading around the world, all businesses globally should be taking steps to coordinate with remote staff and prioritize the security of company communications. Read our latest article on China Briefing, which examines the technical and administrative steps that can be taken to ensure your business runs efficiently and effectively at this time – COVID-19 Global Outbreaks: Coordinating Your Remote Business Operations.
  • March 12 – China reported 15 new infections in mainland China, eight of which are in Hubei. There have been 11 new deaths, 10 of which were in Hubei.
  • Globally, the new strain of coronavirus has now spread to over 110 countries, with 119,541 people affected around the world and death toll at 4,292
  • The World Health Organization has declared COVID-19 as a pandemic, stating that the number of cases outside of China has increased 13-fold in the past two weeks. WHO Director-General Dr Tedor Adhanom called on all countries to take “urgent and aggressive action.” He continued by saying, “all countries can still change the course of this pandemic.”
  • Australia has announced a AUD $17.6 billion (US$11.4 billion) economic stimulus package in a bid to keep Australians in jobs and support households. The package includes incentives to fast track investments, wage subsidies for apprentices, cash payments of up to $25,000 for small and medium businesses.
  • The US has announced that it will suspend all travel from the European Union for 30 days, beginning this Friday. This comes as the US reached 1,000 confirmed cases, and the number of deaths rose to 37.
  • Key industries in Wuhan are set to resume, including public transport, medical supply, and production of daily necessities, with workers receiving the okay to return (see official announcement here). Industries crucial to national or global supply chains will require permission from relevant authorities before they can resume production. Other companies cannot resume operations before March 20, 2020. However, educational institutions are still delayed from reopening pending scientific assessment.
  • March 11 – China is now reporting an increase in imported cases as the domestic spread of the virus has significantly slowed down. 40 percent of the new cases reported on Wednesday morning by the National Health Commission were imported from overseas, bringing the total number to 79, as reported in the South China Morning Post today. China reported only 24 new cases and 22 new deaths, including a record low of new cases in Wuhan, the epicenter of the outbreak (13).
  • Global confirmed cases of COVID-19 crossed 113,000 and total deaths exceeded 4,000, according to the John Hopkins University tracker.
  • Outside China – Italy (9,172 confirmed), South Korea (7,478), and Iran (7,161) remain the worst-hit countries, while the situation in France, Japan, Germany, Spain, and the US are worrisome due to the growing infections.
    Italy extended its lockdown to the entire country on March 10 after initial restrictions on North Italy failed to contain the spread of the infection.
  • March 10 – On Tuesday morning, Chinese President Xi Jinping visited Wuhan for the first time since the epidemic began, signaling that Beijing’s control efforts may be at a turning point.
    Mainland China reported just 19 new confirmed cases on Monday; the total number of infections in the country is now 80,924, according to the country’s National Health Commission.
  • On Monday, both the US and UK stock markets suffered the biggest plummet since the 2008 financial crisis. In New York, the Dow Jones Industrial Average sank more than 2,000 points and S&P 500 plunged 7 percent.
  • March 9 – The John Hopkins tracker shows that confirmed cases of COVID-19 worldwide has crossed 110,000 to 111,321 cases as of March 9, 2020. The global death toll is now at 3,892. Mainland China has a total of 80,735 cases.
    On Monday morning, China’s National Health Commission said it recorded 40 new coronavirus cases – all but four cases diagnosed in the city of Wuhan. This is the lowest daily increase since China began daily reporting on January 20. China registered 22 deaths – all were in Hubei province except for one in Guangdong; total deaths in China reached 3,119.
  • With Russia cancelling the annual St. Petersburg International Economic Forum (SPIEF) event in June, it seems apparent 2020 will see mass cancellations of events inviting global attendees for most of the year.
  • March 6 – In mainland China, confirmed cases reached 80,552. While the epicenter of the outbreak, Wuhan, reported 126 new cases over 24 hours, the rest of Hubei province reported zero new cases. A Reuters estimate puts the global number of confirmed cases at over 98,000 with more than 3,300 deaths recorded. The worst affected country outside of China is South Korea, with over 6,500 confirmed cases – more on our sister publication, ASEAN Briefing, accessed here.
  • March 5 – Confirmed cases in mainland China reached 80,409 with 139 new cases reported since yesterday. Death toll is 3,012 after 31 new deaths recorded on Wednesday.
  • The Guardian reports that the global death toll is at 3,190 – more than 93,000 people infected in more than 80 countries. The worst hit country outside of China is South Korea, which recorded 5,328 cases of COVID-19 as of Wednesday; to learn more – read our coverage on affected countries across Asia, including ASEAN here.
  • China has extended the deadline for tax filing in March by one week, from March 16, 2020 to March 23, 2020, nationwide. See our latest update on China Briefing here.
  • March 4 – Mainland China confirmed 119 new cases, 38 new deaths on March 3. At the end of Tuesday, the total cases of infection stood at 80,270 in the country. As per these numbers, the rate of infection has slowed down since the previous day when 125 new cases had been reported.
  • China Briefing has compiled a list of support policies implemented by China’s central and local governments to ease the compliance and financial burden on businesses across the country, including foreign-invested enterprises and foreign trade. The list serves as a COVID-19 policy tracker for businesses in China and can be read here; it will be continuously updated.
  • Hong Kong is planning to run two charter flights from Wuhan to bring 533 residents back home. The number is tentative as the people will undergo multiple tests to ensure they are not infected by the virus. The Hong Kong residents include pregnant women, cancer patients, and students who are expected to give exams. Hong Kong officials are making extensive arrangements in advance to prepare against all public health risks, including that of cross-infection. There will be two doctors and two nurses on board each of the two flights. All the entrants will be immediately taken to a quarantine center by special transport where they will have to stay for 14 days.
  • On Tuesday, Hong Kong, Guangdong province, and Shanghai announced that all people entering their respective jurisdictions will need to undergo a mandatory 14-day quarantine – if they have traveled to any of the seriously coronavirus-affected regions. There are strict penalties in place in case any person misreports their travel histories. The latest rules apply to all nationalities and seeks to avoid import of new infections as well as contain the domestic spread of the outbreak.
  • March 3 – China’s daily reporting on Tuesday stated there were a total of 80,151 infections and 125 new cases of which 114 were confirmed in Hubei. Hubei also recorded all the 31 new deaths in the country. The death toll is 2,943. However, 59 percent of those diagnosed have recovered (47,204 people). All indications therefore point to numbers dropping. Worldwide, infections crossed 90,000 across 60 countries.
  • Our special issue of China Briefing magazine, titled “Operating Your China Business during a Crisis and Contagious Disease Outbreaks” is available as a complimentary download and offers critical operational insights for managers in China whose businesses have been impacted by the COVID-19 outbreak. We also discuss the available IT solutions as China’s remote workforce experiment becomes the new normal, and answer important HR, payroll, and legal questions.
    The magazine has been made available as a free download for a limited duration – see here.
  • Nearly 300 million people are back to work in China although smaller companies are finding it difficult to resume operations after the extended Lunar New Year break according to The Guardian.
  • March 2 – Global death toll surpassed 3,000 on Monday. Worldwide, Covid-19 has infected more than 88,000 people and spread to more than 60 countries.
    China’s national health commission reported 202 new infections today and 42 new deaths; this is the lowest daily rise recorded since late January, according to The Guardian. As epicenter of the outbreak, Hubei continues to record the most new cases at 196 out of 202 as well as all the deaths. China’s death toll has reached 2,912.
  • March 1 – The WHO raises its assessment of the risk of spread and impact of the coronavirus to ‘very high’ at a global level as new infections continued to rise sharply outside China.
  • February 27 – As of 6am Geneva time – the WHO reported that China had recorded a total of 78,630 confirmed cases; 2,747 deaths. There have been 3,474 cases reported outside China – in 44 countries – and 54 deaths. This is the second consecutive day where the number of new reported infections have exceeded – outside China.
  • As of Wednesday, February 26, Chinese health authorities stated that the rate of new infections had slowed down on the mainland with 433 new confirmed cases and 29 deaths.
  • February 26 – As per the latest data released by the AP, total confirmed global cases are 81,002 with 2,762 deaths. Cases recorded in mainland China are 78,064 with 2,715 deaths – mostly in Hubei Province.
  • Amid the social and economic disruption of the coronavirus outbreak, the Chinese government has released a variety of measures to help foreign-invested enterprises (FIEs) withstand the economic impacts. We cover the policies briefly in our latest article here.
  • February 25 – 80,000 people have been reportedly affected by the Covid-19 as of Tuesday. This includes 77,658 cases in mainland China and 2,663 deaths, predominantly in Hubei Province. Hong Kong has recorded 81 cases and 2 deaths, Macau has 10 cases.
  • February 23 – Over the weekend, China has reported 648 new confirmed cases, and 97 additional deaths, bringing the total to: 76,936 (confirmed) and 2,442 (deaths) in 31 provincial-level regions in mainland China, according to the National Health Commission at 24:00 on Feb 22.
  • February 21 – The Chinese mainland has reported 889 new cases, with 75,465 confirmed cases, 5,206 suspected cases, and 2,236 deaths in total (as of midnight February 20), according to China’s National Health Commission.
  • February 20 – The Hubei provincial government announced to postpone the restart of businesses to March 11, 2020. The epidemic prevention and control headquarter of Hubei said the situation remains tense despite a drop in daily reports of new infections in the province. We provide the most updated map tracking factory/office re-opening across China here.
  • What are the key economic impacts of the coronavirus on China’s economy? How can I successfully manage my Asia business during this time? Register for our upcoming webinar “Coronavirus Outbreak: Navigating China HR and Operational Questions” here (24th February, 2020 | 3PM-4PM China Time).
  • China is temporarily reducing social insurance commitments on SMEs to combat the financial stress caused by the Covid-19. Specifically, the State Council made a surprise decision to reduce or exempt corporate social insurance premiums (pension, unemployment, and work injury insurance) for enterprises, and defer payments made to the housing provident fund applicable for the next few months. We explain the new policy announcements in our latest article, “China to Reduce Corporate Social Insurance Premiums, Defer Housing Provident Fund Payment.”
  • Total cases in mainland China reached 74,576 with 394 new confirmed cases. The method of calculation has changed once again with Hubei’s health commission separating suspected cases from the confirmed cases once again. The Guardian explains this change – the new system has removed people who were clinically diagnosed (through scans and assessing symptoms) but were found negative through the nucleic acid test.
    Deaths from the Covid-19 in China now stands at 2,118 – 114 in the last 24 hours with 108 deaths recorded in Hubei Province.
  • February 19 – Total cases in mainland China stands at 74,185 and the total deaths from the virus reached 2,004. Globally, the total number of infections are 75,152. Confirmed cases in Hong Kong has reached 62. The Guardian reported a 40 percent spike in fatalities in Hubei overnight but also said that the rate of infection in China has slowed down with a fall in the number of new cases.
  • New investment opportunities are emerging in China’s online retail, education, telemedicine, pharmaceutical, and IT industries as a direct and indirect consequence of changing consumer patterns and business practices during the Covid-19 outbreak – latest from China Briefing here.
  • Chinese state media is reporting that officials are conducting house-to-house checks in Wuhan, the epicenter of the coronavirus outbreak and has a population of 11 million. Anyone suspected of carrying an infection will be tested and those who have had contact with infected patients will be quarantined. Those delaying the reporting of symptoms will be punished.
    The Guardian also reports the following as published in the Wuhan newspaper, Chutian Daily: “10 quarantine centers similar to the makeshift Fangcang hospital will be set up across eight districts in the city, providing over an additional 11,400 beds for people showing mild symptoms. Buildings in factories, industrial estates and transport centers were being converted into make shift centers for housing patients.” Further, “all communities and villages would be placed under around-the-clock “closed-off” management, in effect putting them under lock-downs.” In addition, the state-funded website, The Paper, is quoted reporting that “from Tuesday, anyone who buys cough medicine or treatments to bring down a fever in chemists or online will need to use their ID card.”
  • China’s State Tax Administration (STA) has announced a further extension for the deadline for tax filing in February to February 28.
  • The WHO has stated that the Covid-19 causes only mild disease in 80 percent of the people infected and has impacted older people more severely.
    “It appears that Covid-19 is not as deadly as other coronaviruses, including Sars and Mers,” said the WHO director general, Dr Tedros Adhanom Ghebreyesus, as officials were “starting to get a clearer picture of the outbreak”.
    Chinese authorities have provided the WHO with data on 44,000 cases of Covid-19 recorded in Hubei province, the epicenter of the coronavirus outbreak. It also appears that the virus does not affect children in the same way as adults. Tedros elaborated: “More than 80% of patients have mild disease and will recover, 14% have severe disease including pneumonia and shortness of breath, 5% have critical disease including respiratory failure, septic shock and multi-organ failure, and 2% of cases are fatal… The risk of death increases the older you are.”
  • February 18 – The total number of infections confirmed in mainland China has reached 72,436 with 1,886 new confirmed infections reported on Monday. According to the country’s national health commission, 12,552 patients have so far recovered and been discharged from hospital.
    There were 98 new fatalities on Monday; 93 of them were recorded in Hubei Province with 72 of the deaths reported in the provincial capital and epicenter of the outbreak – Wuhan.
  • China’s legislature has postponed the Third Session of the 13th National People’s Congress (the annual Two Sessions meeting) that was scheduled to start March 3. This will be the first time the session is being postponed since becoming a fixed feature on the political calendar, and the reason is the obvious concerns associated with the mobilization of thousands of officials, delegates, and journalists to the capital as the country looks to curtail public gatherings. Further, officials will be focused on epidemic control.
  • The Guardian reports that Xinxian country in Henan Province, which is south of Beijing, is extending the quarantine period for its citizens to 21 days.
  • After Wuhan, Xiaogan city in central Hubei has enforced self-quarantine on its citizens to curtail the spread of the virus. The city has the second highest number of confirmed cases after Wuhan.
  • February 17 – Total confirmed cases of Covid-19 in China are 70,548; there are 2,048 new cases as per the health ministry’s Monday briefing – out of which 1,933 were reported in Hubei Province. The death toll in China has reached 1,770 – with 105 new deaths, out of which 100 were in Hubei.
  • February 16 – China announces a total of 68,500 infections and 1,665 deaths, with a Saturday overnight increase of an additional 2,000 cases. This comes after an overall decrease in infection rates.
  • Enterprises in Hubei Province are now expected to resume work starting February 21. The starting dates for colleges, primary and secondary schools, vocational schools, technical colleges, and kindergartens are also postponed. Wuhan city is a major manufacturing hub in Hubei and has been in lock down since January 23. This article shows the latest map explaining the official position – Updated: China Factory and Offices Reopening Schedules after Lunar New Year.
  • February 14 – Total number of confirmed cases in mainland China reached 63,851 – seeing a rise of 5,090 new cases. The death toll has reached 1,380 with 121 new deaths recorded on Thursday. (Note: The spike in the number of cases is due to the change in the methodology adopted by China for confirming cases, as mentioned previously.)
  • February 13 – Some confusion in China over the numbers of new overnight Covid-19 cases. Hubei’s Health Commission state an overnight rise of 14,440 new cases, while according to the Global Times, the overnight infections increased by 16,568. The latter figure means there are 61,221 confirmed cases in China, the majority of them in Hubei. The rise is far larger than previously recorded, due to a change in how infections are included in daily figures. This means that the jump is not caused by the virus suddenly becoming more infectious.
    In related news, Beijing has dismissed both the Hubei Party Secretary and the Wuhan city mayor, and replaced them with new officials from Shanghai and Jinan.
    The Director of the Hong Kong & Macau Affairs Office in Hong Kong has also been sacked.
  • What do China’s wildlife protection laws say about the pangolin – an endangered species now suspected as a carrier of the coronavirus (Covid-19)? Our latest op-ed from Chris Devonshire-Ellis can be read here.
  • China has rolled out a series of preferential policies related to corporate income tax, value-added tax, and individual income tax to stimulate the production capacity of businesses affected by the coronavirus outbreak as well as to support individuals and firms involved in fighting the epidemic. Read our latest article here.
  • 10 members of one family in Hong Kong were infected while sharing Hot Pot with a mainland Chinese relative who had the virus. People are being urged not to eat from communal shared dishes and to use individual bowls.
  • The incubation period of the coronavirus could be longer than 14 days. South Korea reported their 24th case yesterday who had been in quarantine and had not had contact with any infected patients since January 25 – an 18 day time-frame.
  • Chris Devonshire-Ellis states that in the aftermath of the coronavirus, the Chinese government need to embark on a mass education campaign concerning the treatment and eating of wild animals. Tougher penalties should be introduced for the capture, trafficking, and consumption of all such animals, while the sanitary conditions of China’s traditional wet markets require a massive investment and overhaul. Products should be stored away from each other and the display of wild animals banned, in addition to the presence of wild birds and rodents entering such markets being prevented. Despite the initial high cost, Chinese sanitation companies and other specialists in this field can become world leaders in this market within a decade as the conditions China currently experiences are also prevalent in other parts of Asia, Africa, and South America.
  • China’s NDRC reports that 22 provinces in China have seen staff return to work, and that 58 percent of coal production and 95 percent of grain production and processing capacity has resumed, both important to maintain as energy and food supply stocks have run lower. Next week should see a further uptick in economic activity as the government expects 160 million people to return from the extended break on Monday, February 18.
  • February 12 – Cases in China reached 44,653 with 2,015 new cases. That represents a decrease of 18.6 percent over Tuesday. New fatalities reached 97 over-night but speaks to a reduction in the fatality rate, now at 10.2 percent. The spread of the coronavirus is slowing.
  • The coronavirus is officially named Covid-19, WHO chief Tedros Adhanom Ghebreyesus informed reporters in Geneva on Tuesday. The name consists of CO for coronavirus, VI for virus and D for disease; and 19 stands for the year 2019.
  • American lawyer Dan Harris is publishing pretty bleak (and inaccurate) opinions about the difficulties facing US companies in China through his article “The Cornoavirus is Wreaking Havoc on Supply Chains“. Harris is outspoken and his firm is based in Seattle, not China. If your business needs solutions, not a list of problems, contact us at china@dezshira.com and we’ll help sort out any supply chain issues and clarifications – we have 300 staff and 12 offices across mainland China, and our offices are open for business.
  • Chinese media reports that two senior officials in Hubei Province – party secretary of the Health Commission of Hubei Province, Zhang Jin and the director of the Hubei Provincial Health Commission, Liu Yingzi – have been fired.
  • The New York Times reports that thousands of people are being quarantined in the city of Tianjin after a cluster of new coronavirus cases were linked to a department store in the Baodi district; about a third of the 102 new coronavirus patients in Tianjin were said to have shopped or worked there.
  • Hong Kong chief executive Carrie Lam asks citizens to stay at home to contain spread of the virus as part of a strategy of “social distancing”. The Guardian reports that more than 100 residents in 35 households were evacuated from a high-rise apartment on Cheung Hong Estate, Tsing Yi, in the early hours of Tuesday, after two residents were confirmed to have contracted coronavirus. Health officials are trying to contact nine more households that need to be moved out from the complex, according to reports from the South China Morning Post.
  • February 11 – China’s coronavirus cases rose to 43,138, with 1,018 deaths. The total number of recovered patients are now 4,284, including 2,277 in Hubei Province. (Source: John Hopkins University real-time coronavirus tracker, see here.)
  • China’s central government announced a slew of new measures supporting the timely supply of consumer medical necessities, prioritizing the import-export of technology, reducing import tariffs consistent with the Phase One US trade deal, and opening up more financial channels of assistance for foreign trading businesses. See our article here.
  • Hong Kong confirmed its 42nd case, Monday night (February 10).
  • Good article from the Guardian science correspondent about the longer term potential of the n-CoV here.
  • Hong Kong reports its 38th case. A real time map of Hong Kong and the impact of the coronavirus can be seen here.
  • A China Briefing map showing all China Provinces and return to work dates is here.
  • China infections outside Hubei Province drop from 890 on February 3 to 444 on February 9, according to the Global Times, citing the National Health Commission.
  • February 10 – China reports 40,171 infections and 908 deaths as of Monday morning.
  • February 9 – There are now 37,554 cases and 813 fatalities; however, the WHO says the infection rate is “stabilizing”.
  • Reports from mainland China that local communities are failing to report potential cases due to the immediate quarantine inconveniences incurred. Whistleblowers face being ostracized.
  • Travelers from China who break Hong Kong quarantine laws face 6 months jail.
  • Fatality patterns suggest N-CoV is more transmissible with colder climatic conditions and is more harmful to patients with long term smoking habits. China is the world’s largest tobacco market with 2.4 trillion cigarettes consumed annually, with middle-aged males being the largest consumer group. This group also has a disproportionate number of N-CoV infections and fatalities. Wuhan also suffers from high air pollution. A January 2020 summary is here and a real-time Wuhan air quality tracker is here. This suggests that the likelihood of acquiring n-CoV increases given specific climatic, local public health, and patient behavior conditions.
  • The Chinese government has issued new regulations to severely punish people who disrupt epidemic control work. This includes employers forcing employees to work before official notices of factory and other employment resumption. Those who violate the rules are subject to speedy arrests and immediate jail sentences.
  • The n-CoV virus is 99 percent similar to that found in Pangolins, a rare and protected species in China related to anteaters, yet one that is sought-after among certain gourmets. Pangolins are not farmed and can only be caught in the wild.
  • February 8 – China infections overnight (Friday) reach 34,546 cases and 722 deaths, including an American. Fatality rate has slowed for second day. Non-China confirmed infections are now 320 in 27 other countries and two deaths.
  • New coronavirus advisory for Russian businesses in China here.
  • Singapore has raised Code Orange for the n-CoV outbreak, the second highest. For updates on ASEAN and Asia by country, travel restrictions in place and business advisories please click here.
  • February 7 – confirmed cases of infection in China now 31,161; death toll is 636 in China, 1 in Hong Kong, and 1 in the Philippines. Total global infections pass 31,441 – with more than 280 cases reported in 28 countries.
  • Chris Devonshire-Ellis on the recent decisions by the UK, US and other governments concerning their attitude to China and introducing slight suspensions and travel bans: “Elected officials rarely engage in Regulatory Impact Assessment in a meaningful way when faced with public health problems. Permitting travel has a cost and benefit. So does restricting it. Epidemiologists and economists can come up with such assessments. Politicians are much keener to be seen as decisive in the face of uncertainty, and cost their economy billions, than be confronted with an angry widow on the hustings. In transition or developing economies, those forgone billions could have saved hundreds of thousands of lives via public health programs & hospital services, for endemic diseases other than coronavirus. On the other hand, epidemics in developing and transition economies can be harder to rein in. There is no transparency in government decision making, just “our officials advise us, and out of an abundance of caution we have decided…..'”
  • Global total now 31,368 cases (China 31,102), 638 deaths (629 China), with 4,833 new cases overnight (Thursday, February 6).
  • We are hearing accounts of travelers in some ASEAN countries being denied entry if they possess any China visa history in their passport. While this may not be official policy, it appears to be implemented at certain border crossings in more remote areas. Intra-Asian travel may best be arranged through main exit-entry points.
  • China’s national health commission said that, as of midnight yesterday (Wednesday), there were 28,018 confirmed cases throughout the country – a rise of 3,694 and the biggest 24-hour rise, and 24,702 suspected cases and 563 deaths.
    WHO has asked for US$675 million from member countries to fight the outbreak.
  • Chris Devonshire-Ellis states “There is a contradiction between the stated coronavirus statistics and the behavior of certain national governments. This means one of two things: there is either an over-reaction concerning the severity of the outbreak, or actual numbers are being under-reported and this news is being suppressed by more than just the Chinese. The WHO needs to up its game and get better involved in its communications with the global public over what is going on.”
  • Hong Kong’s Cathay Pacific is asking 27,000 employees to take up to three weeks of unpaid leave between March and June.
  • All arrivals from mainland China to Hong Kong to be immediately quarantined.
  • China has reported an outbreak of the deadly H5N1 bird flu in Hunan province, which lies on the southern border of Hubei province, the epicenter of the rapidly spreading coronavirus. Local authorities have culled 17,828 poultry after the outbreak. No  human cases of the H5N1 virus have been reported.
  • Useful John Hopkins University real-time coronavirus tracker here.
  • South Korea’s Hyundai Auto becomes first major Asian manufacturer to suspend production, says cannot obtain supply chain parts from China.
  • American Airlines and United Airlines suspend flights to Hong Kong until February 20.
  • As of February 5 – 24,505 cases confirmed, 24,292 being in mainland China; 490 deaths.
  • Unverified Wuhan medic says that coronavirus infection figures are inaccurate as patients who die prior to be tested are not considered as cases. Estimates real cases as being nearer 90,000 in Wuhan alone.
  • Coronavirus mortality rate is currently 2.1 percent, consistent with normal influenza.
  • UK issues advisory for its nationals to leave China on basis “it may become harder to access departure options over the coming weeks”.
  • Our ASEAN Briefing Coronavirus Update notes the first cases of cross-border infections in Asia between Malaysia and Singapore, and Thailand and South Korea. Daily updates concerning the situation in ASEAN and other Asian countries here.
  • Hong Kong has reported its first coronavirus death.
  • Article about the Applicability of Force Majeure as concerns the coronavirus in China affecting contractual obligations and the legal implications and procedures to follow by Vivian Mao of Dezan Shira & Associates here.
  • The coronavirus has now infected 20,629 and caused 427 deaths globally, with 20,483 infections reported in China as of Tuesday morning. This is an 18 percent overnight rise, a lower rate than a week ago when infections were spreading at 29 percent.
  • Hong Kong government closes 10 of 13 border crossings with mainland China; further reduces mainland flights.
  • The People’s Bank of China has stated it will provide support for enterprises affected by the coronavirus by reducing the interest rate on loans, increasing trust loans and medium- and long-term loans. It will also allocate 300 billion yuan (US$43.24 billion) in special refinancing loans for important national banks and some local banks from Hubei province and other key provinces.
  • Answers to frequently asked China HR questions regarding handling the coronavirus and extended holiday issues in China by Dezan Shira & Associates China HR and Arbitration in-house counsel Allan Xu here.
  • According to The Guardian, the highest confirmed cases outside China, Hong Kong, and Macau are – Japan (20 people), Thailand (19), Singapore (18), South Korea (15), Australia (12), and the US, which has confirmed its eleventh case overnight.
  • February 3 – 17,459 confirmed cases globally. The death toll is 362 and 489 patients have recovered.
  • China’s Foreign Ministry has requested ‘urgent’ assistance in the provision of protective medical items, such as masks, goggles and suits.
  • Lunar New Year Holiday extensions update: 24 provinces and cities in China have announced a further extension of the current Lunar New Year holiday. These are – Anhui, Chongqing, Fujian, Guangdong, Guangxi, Guizhou, Hebei, Heilongjiang, Henan, Hunan, Inner Mongolia, Jiangsu, Jiangxi, Jilin, Liaoning, Ningxia, Shaanxi, Shandong, Shanghai, Shanxi, Suzhou, Xi’an, Yunnan, and Zhejiang; all have stated that non-essential businesses need not re-commence their operations until next Monday, February 10.
    Hubei province, where Wuhan is located, has stated that the holiday will last until at least February 14.
    These regions accounted for almost 69 percent of China’s gross domestic product (GDP) in 2019.
    In addition to this, Beijing has said companies should let employees work from home until February 9 (with the exception of those working for public utilities and companies providing daily essentials) while Tianjin has urged schools and companies to not resume operations until further notice (again with the exception of those working for public utilities, daily necessities or those involved in the prevention and control of the outbreak).
  • The new hospital in Wuhan to treat coronavirus patients is set to open; a 1,000-bed hospital, it was built in a span of just 10 days. A second hospital, at a capacity of 1,500 beds is also under construction in the city.
  • Official data released Monday show China’s industrial profits declined 3.3 percent, year on year, to RMB 6.2 trillion (US$898 billion) in 2019. It was the first full-year decline since 2015 when profits fell 2.3 percent and can be attributed to the US-China trade war.
    China’s factory activity expanded at its slowest pace in five months according to January PMI data from Caixin. However, the data does not reflect the early impact of the public health crises caused by coronavirus outbreak. The Caixin data is considered ‘normal’ at this time of year. However, analysts expect “a big plunge” in February PMI numbers – to a range between 40 and 45 – due to the virus outbreak. China’s non-manufacturing PMI rose from 53.5 in December to 54.1 in January, showing expansion.
  • Chinese singers and actors Jackie Chan, Xiao Zhan, and Tong Liya sing “Believe Love Will Triumph” to call for people to stand together and stay strong during the fight against the coronavirus.
  • Shanghai stock market tanks by 8.7 percent, China commodities trading exchange suspended. Hong Kong market slightly up amid hopes of early recovery and medium term views. China’s yuan hits lowest rate against US dollar since August.
  • Possible post coronavirus economic growth compared with China’s historical performance after the Asian Financial Crisis and SARS by Chris Devonshire-Ellis here.
  • China’s financial regulators have prepared an emergency package, including an RMB 1.2 trillion (US$173 billion) boost of liquidity, to support companies and markets as they brace for a sharp stock sell-off on Monday in response to the deadly coronavirus outbreak, according the Financial Times.
  • Unnecessarily sensationalist viewpoints from the China Law Blog “Leave China NOW!,” which is both a bit late as many airlines have banned flights, and somewhat disrespectful, calling foreigners staying as wanting to be “more macho than the next guy” together with the Washington Post, who bring political US-China rivalry into the viral outbreak by calling it “A Communist Coronavirus” – both perspectives rather unnecessary and unhelpful at this time.
  • Interesting read from The Diplomat entitled “The Geopolitical Consequences of the Coronavirus Outbreak”.
  • Coronavirus may spread through digestive system, researchers from the Renminbi Hospital of Wuhan University and the Wuhan Institute of Virology of the Chinese Academy of Science report. Xinhua reports that studies after studying patient stool samples and rectal swabs show that many coronavirus patients suffered only from diarrhea – instead of classic viral symptoms like fever.
  • Professor David Hui, from the Chinese University of Hong Kong, one of the world’s leading virologists and adviser to the WHO, states that “One in four cases of the Novel Coranaviurus are severe…..the virus is still evolving.”
  • ASEAN and other Asian updates here.
  • Chinese military being deployed in China to assist with medical supplies and supply logistics.
  • February 2 – 2,590 new Saturday overnight confirmed infections, bringing the total to 14,380. According to a study published on Saturday by scientists from the University of Hong Kong, the virus may have infected as many as 75,815 people in Wuhan, the epicenter of the outbreak.
  • The Guardian reports China is exempting US imports from the retaliatory tariffs introduced in the trade war. China will instead “implement more preferential import tariff measures from January to March 2020, to step up support for prevention and control of the [ongoing] epidemic.” Rules on tariff exemptions can be expected to be relaxed on disinfectants, protective supplies, and emergency vehicles.
  • American Airlines suspends flights to China.
  • US issues travel ban on all foreign nationals arriving in the country who have visited China in the past 14 days – will not permit entry. Returning US citizens to be quarantined for two weeks.
  • Australia has issued a travel ban on non-Australian citizens arriving from China, Qantas suspends China flights until March 29.
  • Air New Zealand suspends flights to Shanghai until March 29.
  • UK withdrawing staff from China Embassies.
  • February 1 – China confirms 11,791 cases of infection; death toll reaches 259. Hubei Province remains the hardest hit, reporting 45 new fatalities according to The Guardian.
  • All direct flights to China from Russia halted from 9 pm GMT on Friday, except the national airline, Aeroflot.
  • Russia has confirmed two cases; both Chinese citizens, they have been isolated.
  • Associated Press reports that more than 9,800 cases of the coronavirus have been confirmed as of January 31, evening. 9,692 cases in mainland China, 12 cases in Hong Kong, and 5 in Macao.
  • China extends the deadline for tax filing for January 2020, see here.
  • Britain confirms first two cases.
  • Dezan Shira & Associates’ Chris Devonshire-Ellis on infection trends, logistics and supply chain issues, the impact on China business cash flow projections, and the need to keep your China staff motivated. Please see here.
  • WHO declares global emergency on January 30 as 9,320 confirmed cases and death toll hits 213.
  • Italy suspends flights to China.
  • Air France suspends flights to China, sixth infection confirmed in France is a doctor treating patients.
  • Self-disinfecting ward, medicine and food providing robots being trialed in hospitals in Guangdong.
  • China arranging charter flights to bring stranded Chinese travelers overseas back home.
  • Russia stops issuance of electronic visas to all Chinese nationals, to completely close border with China from midnight tonight, January 30, 2020.
  • Handling China HR issues arising from the extended Lunar New Year, and related issues. Advisory from Dezan Shira & Associates here.
  • Emergency meeting of WHO viral experts being held today. WHO says, “The whole world must be on alert to deal with the spread of coronavirus”.
  • Leading virologist in Thailand says vaccine could take a year to develop.
  • Central Commission for Discipline Inspection (CCDI) announces that “anyone found not effectively carrying out President Xi’s instructions in the fight against the virus or misappropriate rescue funds and materials will be punished”.
  • Ikea, the Swedish furniture giant, is temporarily closing all 30 of its stores in China.
  • The Guardian reports that Air Canada is suspending all flights to Beijing and Shanghai from January 30 to February 29. The last flights from the two cities back to Canada will take off on January 30.
  • People’s Daily report that China will resume production of face masks on February 3 (first working day after the national lunar new year holiday extension), and produce 180 million masks per day by the end of February.
  • Jiangxi Province, Shandong Province, and Anhui Province are delaying resumption of work for non-essential enterprises to February 9. Hubei Province announced that enterprises in the province will be closed till February 13.
  • The WHO will meet Thursday, January 30, to make a decision on whether the coronavirus constitutes a global health emergency. Infections have now been confirmed in at least 16 other countries.
  • 7,711 confirmed cases reported by the BBC as of January 29, infections spread to every region in mainland China with a confirmed case reported in Tibet. Death toll has reached 170; The Guardian reports that 162 of the deaths are in Hubei province, where the outbreak originated.
  • WHO estimates mortality rate at 2 percent, less than 10 percent attributed to SARS, but warns the coronavirus could spread globally.
  • UAE confirms four cases in Middle East.
  • British evacuees face two weeks quarantine on UK military base upon arrival back to Britain.
  • Suspected cases in Africa yet to be confirmed.
  • China National Health Commission states “Infections will peak in ten days”.
  • Operating Your China Business Remotely – technical advisory from Dezan Shira & Associates.
  • Washington has advised US airlines they are considering the suspension of all US-China flights.
  • Australian researchers have recreated the novel coronavirus in a laboratory, hastening the development of a vaccine.
  • British Airways has suspended all flights to mainland China. Several countries begin evacuation of their citizens from China. Australia to quarantine evacuees on Christmas Island.
  • Chongqing municipality announced Tuesday night that non-essential enterprises in the administrative area will remain closed till February 9.
  • The number of cases confirmed has risen to 5,974 as of January 29; the death toll reached 132.
  • Guangdong Province issues mandatory order for citizens to wear face-masks in public. Offenders can be arrested and removed from public areas.
  • For our business advisory update about the coronavirus in India from Dezan Shira & Associates local offices, please click here.
  • For our business advisory update about the coronavirus in Vietnam from Dezan Shira & Associates local offices, please click here.
  • For our business advisory update and planning for remote administration in China, please click here.
  • Kazakhstan has suspended visa on arrivals for passengers arriving from China and requires Chinese nationals to have medical certificates certifying fitness prior to entry.
  • Hong Kong has eight confirmed cases. It has announced suspension of all ferries and rail services from mainland China from this Thursday and has cut by 50 percent all inbound China flights.
  • For the latest updates on the coronavirus and ASEAN, please click here.
  • The Philippines has cancelled all visa on arrival facilities from China; other visas issued in China remain valid.
  • Vaccine will not be ready until mid-March, Russia has closed its Far East border with China. Advisory for Russian businesses in China here.
  • WHO expresses ‘confidence’ China can contain the spread of the virus. Indications are infections will peak in the next seven days.
  • China reports 4,500 cases with 1,000 in serious condition – a rise of 45 percent. The death toll has risen to 106.
  • The new coronavirus appears to have an incubation period varying from three to seven days and up to two weeks but can spread before symptoms show.
  • Chinese New Year Holidays extended until February 2 to prevent mass movement of citizens. Shanghai, Suzhou, Guangdong Province, Zhejiang Province, Jiangsu Province, and Yunnan Province extended until February 9. Other provinces and cities likely to extend this further; China Briefing will provide updates.
  • Chinese staff may not be able to return to work immediately.
  • Serious interruptions and cancellations of transport reported across China, expect this to continue for the next two weeks.
  • Mongolia has closed its border with China.
  • Hong Kong is temporarily banning Hubei residents from entering.

The novel coronavirus that has leapt to prominence in the past few weeks is slowly becoming better understood as doctors and virologists start to identify its characteristics.

On January 27, China’s National Health Commission stated that “based on current epidemiological investigations, the incubation period is generally 3-7 days, with the longest no more than 14 days”.

While there are some concerning signs – a non-symptomatic incubation period making immediate diagnosis difficult – it should also be remembered that this is the annual flu season in China, and thus far, the virus appears to be survivable among the young and healthy. Most colds or coughs will turn out to be seasonal, ordinary bugs.

However, the mortality rate of the coronavirus appears to be far higher than is normal; the method of transmission is mainly through respiratory droplets and China’s health minister Ma Xiaowei has stated that people can spread it before showing symptoms. Until the situation can be brought under control, the virus will affect your business in China.

At Dezan Shira & Associates, we have several hundred staff on the ground, just as many other foreign-invested businesses do. We also worked through the SARS experience back in 2002, giving out advice and bulletins to concerned readers in China and beyond.

This article will be updated as the situation unfolds. For updates on government imposed restrictions in China, please refer to this article: Latest Emergency Measures Announced by PRC Government.

 

Impact upon businesses in China 

Human resources

The obvious, immediate impact is that some staff will not be able to return to work on the intended date – this coming Friday, January 31. Although this week is still officially a national holiday, it is recommended that senior management in China take a headcount and establish exactly where staff are and are in direct communication with them. The extension of the national holidays to Monday February 2 should be treated as annual leave and recorded by HR as such.

However, our opinion is that the February 2 return to work may be further extended, possibly until February 9 or even later, as the virus appears to have a two-week incubation period. This means that offices and factories should prepare to be understaffed until that time. It should also be noted that even if staff are able to return to work next Monday, transport services can be expected to be severely disrupted, and other services, such as delivery canteens, cleaning, and so on may also be curtailed. For offices, this means staff may be able to work from home. Factories will likely experience down time.

To action: Conduct an immediate headcount to ascertain where staff are and establish direct communications with them. When possible, arrange for staff to work from home.

Chinese labor law as concerns staff illness

Should staff become ill, employers must ensure their employees can receive their paid statutory medical leave. If an employee needs to take time off work due to an illness and the employee is eligible for statutory medical leave under the law, the employer must provide the leave in accordance with the national and local law, and the employee’s employment contract. The minimum pay standard varies across China but is typically about 80 percent of the total. However, note that if your employee handbook provides for a company medical leave program more generous than the applicable law, you must follow your own internal rules and regulations.

How exposed are you?

It is important to understand the potential impact an enforced slowdown could have on your business. This will vary from sector to sector; however, being aware if your major customers are also under stress is a prerequisite, and especially if your total sales exposure is to companies in China or dependent upon China-based suppliers. Additionally, if your China customer base is exposed, you are likely to face a sales downturn. In our business opinion, China Q1 sales figures are going to be affected, and it may be difficult for businesses elsewhere to obtain fulfillment on orders originating from China.

To action: Conduct an inventory of planned shipments from China and establish whether or not these could be impacted. Open communications channels with suppliers to discuss delivery problems and be prepared to re-source from alternatives elsewhere. China sales will be hit in numerous sectors, so examine your business plan, budgets, and cashflow to be prepared for a hit.

Receivables

There is simply no need for receivables to be beyond 90 days. Now is the time to examine sales contracts and credit terms already given, and to see what can be done to bring these under better credit control. 60 days is reasonable, 45 days even better. Remember if your customer goes bankrupt while in possession of your goods, it is going to be a devil of a job involving court procedures to get them back. It is far better to manage your receivables before goods shipped become a potential asset in somebody else’s insolvent warehouse.

To action: Examine cashflow and attack your receivables. The coronavirus should not become an excuse to delay payments due to you.

Stock take

It is a good idea when tough times lie ahead to examine the exact status of your stock. Is your stock secure? An empty or undermanned warehouse can be tempting. Do the inventory’s contents really add up according to the balance sheet? Now is a good time to conduct internal audits to ensure your inventory is where it should be.

Cash in hand

It is usually a good idea to maintain at least three to four months’ worth of total operating costs in China. This is especially true when times are tough, as contingency financing is more likely to be called upon at short notice. Your China operations may require a cash injection to help them overcome what may be a difficult Q1. If, on the other hand, you are fortunate to have excess cash in China, now may be a good time to repatriate it.

Preparing to downsize 

Reducing head count is one effective way to cut costs in China should your bottom line come under strain. Fortunately, the overall behavior of Chinese staff is conducive to this. As we enter the new year with many contracts coming up for renewal, options include non-renewal, as well as offering deliberately low or no salary increases to non-essential staff. This does need to be conducted in line with China’s fairly strict employment laws, but that does not mean a managed staff reduction plan cannot be put into operation. Downsizing a China business by laying off staff is one way to better manage expenses when the going gets tough. Seek assistance with China’s employment laws if you intend to conduct staff layoffs.

Summary 

Now is an ideal time to conduct a health check on your business as it is impacted by China. Businesses in China should be prepared to revisit their 2020 budgets and downgrade their Q1 sales forecasts if dependent upon sales in China.

Global businesses should check on the viability of receiving shipments on time and make contingency plans if in doubt.

Finally, it may not all be bad news. There are always winners and losers during difficult times. Well prepared and managed businesses will survive and ultimately gain market share in the longer term. A Q2 or Q3 bounce back is also entirely feasible – and it makes sense to bear in mind the need to cater for that eventuality as well.

Meanwhile, for advice or medical and regulatory updates as issued by the Chinese government, please contact our China offices at china@dezshira.com.


About Us

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com

We also maintain offices assisting foreign investors in Vietnam, Indonesia, Singapore, The Philippines, Malaysia, and Thailand in addition to our practices in India and Russia and our trade research fa