Challenges and Opportunities Emerged in China Beyond Coronavirus Pandemic (1)

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Background

The outbreak of a severe and acute coronavirus epidemic, started from Hubei, a central province in China, has spread across the whole country and triggered national enforcement of the first-degree medical emergency counter-actions. Despite providing necessary humanitarian aids, international airlines are cancelling their flights from/to China on instructions from foreign governments, with regards to safety concerns. Several countries have also blocked the trade connections with China for product transition safety.

The original carrier and spreader of the virus were widely believed to be bats, though some researchers remain sceptical. The Chinese government has made it clear that they will be working on an overhaul of environmental sanitation conditions and a crackdown of illegal wildlife markets and trade, and stated that “the outbreak is a major test of China’s system and capacity for governance”, and acknowledged its “shortcomings and deficiencies”.

What we have experienced…

The fear came along with the epidemic is far more frightening than the virus itself. Even in areas where the number of confirmed cases is low, people opt to stay at home to avoid any possible infection, left the city dead. Shops, except for pharmacies, are all enforced by the local government to suspend business until the time when situation subsides. The unexpected epidemic is taking a huge toll on China’s economy during the Chinese new year celebration of 2020, which is supposed to be the time when the first consumption stimulus happens every year.

To contain the spread of the epidemic, authorities in China have extended the one-week Spring Festival holiday for another ten days attempting to reduce the movement of possible virus carriers, which has forced hundreds of thousands of companies to adopt a work-from-home policy and caused manufacturers to remain closed. Schools and universities will not be ready to resume until probably late April, rendering millions of students staying indoors and learning their courses online or via televisions. On top of all, the initiative of ‘the nationwide lockdown’, which has been sarcastically criticised by international press outlets, was cruelly indeed implemented by some local governments. Such arbitrary restrictions range from ‘switching off lifts in high-rise buildings to discourage residents from going outside’ to ‘limiting how many family members can leave home each day’. However stringent these rules are, they work explicitly well reflected by confirmed cases counts, which has downwardly jumped to less than twenty thousand from its peak seventy thousand.

To help contain the possible spread of coronavirus within cities, authorities in Shenzhen and Ningbo have adopted a real-name registration system for use on public transport to tracking commuters’ journeys. Powered by the new tech, the systems require passengers to log their identities by scanning a QR code before boarding various kinds of public transport, with this information the government is able to keep a closer eye on the movements of their citizens and to give notice to the passengers who have shared transport with virus carriers when necessary.

Cinemas are all out of service during the time to curb the crowd gathering, under which circumstance there conceived the first online streaming premiere – the movie ‘Lost in Russia’ debuted on several short video platforms instead of going on big screens – on top of that, it’s free of charge. The deal made between Huanxi Media and ByteDance is not only mitigation to the risk from the publisher, but also a wise move for apps to acquire new users. However, the launch drew controversies on the other hand – more than 20,000 employees in the Zhejiang film industry signed a petition to boycott the film as all the preparing and promoting work done in theatres prior to the epidemic became wasteful. Whether such novelty devised during such a special timing will become a norm and be followed by later films was feverishly discussed online. Nevertheless, whatever impacts it has brought to the industry can only be told by time.

Ecommerce

The movement restriction has banned people from leaving their homes, and also poured a bucket of cold water on the upgrowing e-commerce. Long-distance delivery is not promised during the quarantine due to the staff short. In addition, people are showing little interests in nonessentials and have switched to daily necessities purchasing. Restaurants were forced to shut down which has resulted in a dismal outlook of waimai (food delivery). While looking deeper at civilian life in Hubei, the situation is even worse. Several cities are totally blocked from communication with the outside world, and parcels ordered from e-commerce platforms are either warehoused or cancelled. Residents are barred from walking outside their compounds and are heavily relying on supermarkets and small vendors nearby. The epidemic has really forced people to live the life of the pre-Taobao age.

However, despite the overall dismay, we did see an uptick in short-distant grocery deliveries. The lifestyle app Meituan, which also caters home delivery service, has seen a surge in demand for intracity orders over the past several weeks, usually with a distance less than 10 kilometres. Profit made from supermarket-to-home and random pick-up service has, to some extent, offset the revenue loss afflicted by the lockdown during the period. Another tech giant Didi, which has been heavily focusing on ride-hailing and carpooling service, is also beefing up the market range by entering the same industry since the daily active user base shrank by 54% as people remain home-bound. The newly introduced corresponding feature ‘running errands’ is now available in several cities of southwestern China. The price change on the stock market reflects the eCommerce status responding to the prolonged holiday. It saw a rebound despite a dip on the first day of trading, indicating the trendy lifestyle of ‘shop online and get things delivered from stores in the vicinity’ will become the norm as the lockdown proceeds. Though the general stock performance of the smartphone and telecommunication suffers a decrease, the stock of Xiaomi, the mobile devices producer which relies heavily on online sales, climbed, which is the further case potently exemplifies such a forecast.