(ST. PAUL, Minn., USA) – Our team members in China face daily challenges as they navigate the myriad regulations and safety measures implemented by local authorities and the national government attempting to control the spread of coronavirus (COVID19).
Confinement to home is the hardest part. Schools have yet to re-open after the Spring Festival holiday. Special IDs proving one is a local resident must be presented when going outside. Store visits are restricted to one person per household every two to five days, depending on your location.
Red, Yellow or Green cards must be carried to show your risk level; Red being the highest, and Green being “safe.” In general, there is fear of being quarantined, or even being suspected of requiring quarantine. Although some buses and trains are starting to show evidence of people returning to work, the usually bustling streets are eerily quiet.
Although the first indications of coronavirus go back to late 2019, few citizens became aware of the threat until just before the Lunar New Year (January 25). As my colleague lamented, “During a regular Spring Festival, I’d stay at home on Chinese New Year Eve with my family having dinner around the table, watching TV, talking to my parents and younger sister.
Then, the next day friends and family would get together for dinner, drinks and more talk. The same would be true for the rest of the week. It was always a lively and sometimes drunken time, but so good to catch up with everyone. It’s all gone this year.”
He continued, “I really thought I was going to stay only a week at home when I left Beijing on Jan. 22, 2020. But, the next day, Jan. 23, Wuhan, a metro area with a population nearly as large as New York City and Los Angeles combined, was sealed off. As the situation worsened, Hubei province, all 58.5 million of them, were also isolated from the world.”
Although he was in another province remote from Hubei, travel became very difficult. He eventually returned to his flat in Beijing and continued his homestay there. “I wish this was just a nightmare, or an extended holiday break, instead of being shut off from the world. I hope that soon people can show up on the streets, talk to each other in the elevator, go to restaurants, ride the bus, and take the subways and trains packed with people. Hope and confidence; we need that now.”
Monitoring the Economic Impact
PSR’s team members in China are able to work remotely during this outbreak, and to the best of their abilities continue to monitor the economic impact the coronavirus is having on China.
Many small and medium businesses, restaurants, salons and the like are still suffering, as are the people they employ. As ever, those least able to fend for themselves who are affected most. Factories in many areas have begun to re-open, although production will be slow for the foreseeable future.
The 2008 Labor Law lessened the discrepancy in wages between relatively prosperous coastal regions and the less well-to-do interior regions of the country. As a result, worker retention at factories, especially after the Lunar New Year, became a more common issue than before the law’s implementation.
This year that situation is exacerbated by travel restrictions and fears of infection. Some companies have resorted to bringing in laborers from distant provinces and autonomous regions to make up for those workers who either can’t return or choose not to return. The long-term impact of this is still unknown, but it is certain that training new employees will require patience, and the reboot will be slow.
Inevitably, the timing of the 2020 Lunar New Year (Jan. 24 to Feb. 2) meant that Q1 production in China was going to be somewhat reduced. The government allows time for people to travel before and after the Spring Festival. This is a must, as more than 400 million people are on the move as they travel home to be with family. Naturally, this can affect ship dates and disrupt production schedules. In 2020, the impact of the coronavirus on the entire first half of the year and beyond will be significant, not only in China, but throughout the world.
Power Systems Research data provides annual production and forecast volumes for engines, vehicles, equipment and key components. In the coming weeks our teams in each region will update our data and forecasts accordingly as we work to account for this disruptive occurrence.
To all who are affected, my colleague said it best; “Hope and confidence; we need that now.” PSR
Erik Martin is Director-Asia Region for Power Systems Research.
