Affected by the wave of COVID, businesses in China are struggling to maintain normal operations

Affected by the wave of COVID, businesses in China are struggling to maintain normal operations

Affected by the wave of COVID, businesses in China are struggling to maintain normal operations

BEIJING, Dec 13 (Reuters) – From e-commerce giant to cosmetics brand Sephora, companies in China are scrambling to minimize the impact of rising COVID infections, distributing test kits , encouraging more home working and, in some cases, procuring boatloads of medicine.

After unprecedented protests against often draconian COVID curbs, the world’s second-largest economy abruptly abandoned its zero-tolerance stance against COVID last week. The resulting ferocious spread of the virus has even forced some businesses to close their doors for the time being.

Anecdotally, in cities like Beijing and Wuhan, many workers and their families have succumbed to COVID, though the number of official cases has dropped to less than a fifth of its Nov. 27 peak, as China now conducts far fewer tests.

“More than half of our staff at the mall and hotel are positive,” said a senior executive at a company that manages one of Beijing’s largest shopping complexes.

The manager, who declined to be identified, said the mall was still open with the remaining staff split into two teams and only one team working a particular shift.

The split-shift system is also used by other companies, Chinese regulators and state-owned banks. (9618.HK), which is headquartered in Beijing and employs more than 540,000 people, has been sending out antigen test kits to its staff and is asking those who are sick to stay at home, sources told Reuters of the company.

At Sephora China, which has 321 stores in 89 mainland cities, each store is handling its own staffing issues according to its own situation, an LVMH brand spokesperson (LVMH.PA) said, adding that all staff who are positive will be given paid holidays and possibly work from home.


In another shopping center in Beijing, a gym belonging to the US chain Powerhouse said on Tuesday it would be closed until December 25 to disinfect the premises and protect the safety of staff and members.

“The spread of the virus is serious and there is a great risk of infection,” the gymnasium said. It had just reopened five days ago after being closed for more than two weeks due to district-wide COVID curbs.

“It’s deeply frustrating. Businesses have to shut down due to staff illness, even though they can legally be open,” said Noah Fraser, Beijing-based managing director at the Canada-China Business Council.

“The blame is starting to flow from the companies’ (foreign) HQs to the field team in China, with HQ asking ‘why can’t operations in China overcome these restrictions?’ All other markets have had to adjust and have done so successfully,” she said.

Some factories and restaurants are maintaining COVID-19 curbs, including so-called closed-loop systems that isolate staff from the rest of the world, until they have a clearer picture of how workplaces will be affected.

At Volkswagen (VOWG_p.DE), which has seen its plants in China heavily disrupted by lockdowns this year, production is currently stable but the automaker has reduced office attendance and is asking staff to stay 1.5 meters away when possible, a spokesman said.

Chinese EV maker Nio (9866.HK) also said its production is normal, although it is bracing for infections.

“We have sent trucks of medicines and equipment to the factory to be well prepared,” Nio chairman Qin Lihong told a media roundtable on Monday.

National health officials have so far made little comment on workplace conditions, only urging that high-risk areas should be defined much more narrowly, while manufacturing or commercial operations continue elsewhere.

Julian Evans-Pritchard, senior China economist for Capital Economics, said he believed it would take some time for Chinese households to learn to live with the virus and it could take 3-6 months for consumer activity to you go back to “something that looks like normal”. .”

“So while the COVID-zero transition will benefit most businesses in the medium term, it won’t provide immediate relief and the next few months will still be very challenging.”

Reportage by Joe Cash, Ellen Zhang and Sophie Yu in Beijing; Additional reporting by Casey Hall and Zhang Yan in Shanghai, Martin Pollard in Beijing and Jan Schwartz in Berlin; Written by Brenda Goh; Editing by Edwina Gibbs

Our standards: the Thomson Reuters Trust Principles.

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