Companies in China battle to stem surging Covid-19

Beijing — From e-commerce giant JD.com to cosmetics brand Sephora, companies in China are rushing to minimise the effect of surging Covid-19 infections, doling out Test kits, encouraging more work from home and, in some cases, procuring truckloads of medicine.

After unprecedented protests against often-draconian Covid-19 curbs, the world’s second-largest economy abruptly dropped its zero-tolerance Covid-19 stance last week. The ensuing spread of the virus has even forced certain businesses to shut their doors temporarily.

In cities such as Beijing and Wuhan, many workers and their families have succumbed to Covid-19, though official case numbers have fallen to less than a fifth of a November 27 peak as China now conducts much less testing.

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

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

The split-shift system is also being deployed by other companies, Chinese regulators and state-owned banks.

JD.com, which is headquartered in Beijing and employs more than 540,000 people, has sent antigen Test kits to its staff and is asking those who are sick to stay home, sources at the company told Reuters.

Disinfect premises

At Sephora China, which has 321 stores in 89 cities on the mainland, each store handles staffing issues in line with their situations, said a LVMH brand spokesperson, who said that staff testing positive will get paid leave and can work from home.

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

“The spread of the virus is severe and there is a big risk of infection,” said the gym. It had just after having to shut for more than two weeks due to district-wide Covid-19 curbs.

“It’s deeply frustrating. Businesses are having to close due to staff being sick, even though they can legally be open,” said Noah Fraser, Beijing-based MD at the Canada-China Business Council.

“Blame is starting to flow from companies’ [foreign] headquarters to the team on the ground in China, with HQ asking ‘why can’t the China operations navigate these restrictions?’ All other markets have had to adjust and did so successfully,” he said.

Some factories and eateries are retaining Covid-19 curbs, including closed-loop systems that isolate staff from the wider world, until they get a clearer picture of just how workplaces will be affected.

At Volkswagen, which had its plants in China disrupted by lockdowns this year, production is now stable but the carmaker has reduced office attendance and is asking staff to stay 1.5m apart whenever possible, said a spokesperson.

Sent trucks

Chinese electric vehiclemaker Nio also said its production is normal, though it is bracing for infections.

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

National health officials have so far made few says on workplace conditions, only urging that high-risk areas should be much more narrowly defined, while production or business operations continue elsewhere.

Julian Evans-Pritchard, a senior China economist for Capital Economics, said he believes it will take quite a while for Chinese households to learn to live with the virus and it could take three to six months for consumer activity to return to “something resembling normality”.

“So even if the shift away from zero-Covid-19 will benefit most businesses over the medium term, it doesn’t provide immediate relief, and the next few months will still be very challenging.” 

Reuters