Businesses in China reel under zero-Covid pressure

Fiona Shi has lost her job twice during the pandemic – first, in 2020 when Covid ravaged the travel industry, then this year as China’s tough virus controls hammered businesses in the world’s second-largest economy.

China is the latest major economy welded to a zero Covid strategy – putting businesses and workers at risk of instant lockdowns, freezing activity in the services sector and tangling supply chains crucial for factories to sell their goods .

As the country battles its worst outbreak since 2020, its urban unemployment rate has risen to its highest level in two years and the pain is being felt by both blue-collar and white-collar workers.

“Many places say they don’t hire people over the age of 35,” said Shi, 38, who pointed to the difficulty of returning to entry-level positions after leadership positions.

She held a leadership position in the hospitality industry in 2020 when the coronavirus halted nearly all travel as governments imposed social distancing measures and restrictions on movement.

Two years later, the Pekingese found herself in the same position after losing her job in a multinational.

“The pandemic has also made it more difficult…many places have frozen workforces,” she told AFP. “I’m really anxious.”

Months of unpredictable Covid restrictions – including instant lockdowns and severe travel restrictions – have hit dozens of cities, from the central business district of Shanghai to the northern breadbasket province of Jilin.

A US Chamber of Commerce survey released this week showed almost all respondents cut their revenue projections, while in a separate study 11% of European companies said they would cut operations in China due to the Covid measures.

Domestic companies have also tightened their purse strings.

Ride-sharing platform Caocao Chuxing has laid off staff, with Chinese media reporting a 40% rate.

Some employees of e-commerce giant Alibaba have also reportedly been asked to leave, according to state-run newspaper Legal Daily.

– “The situation is grim” –

The imposition of restrictions to stamp out Covid outbreaks this year has intensified pressure on companies already struggling with a slowing economy and regulatory clampdowns in sectors such as property and technology.

Bai, 27, told AFP that she had been fired by an American technology company which was preparing to end its activities in China.

“In a way, we saw it coming,” she said, giving only her last name. “Its operations in China lost money.”

“It’s not the first to exit the Chinese market and it won’t be the last.”

Bai, based in Beijing, said it was the second time she had lost her job due to the pandemic.

In 2020, as the virus raged in China, she was fired by a cruise operator due to fears over her nationality, she said.

Andrea Zhang, 24, who handled event planning, said her employer closed its clothing stores in March and April when the outbreaks broke out this year.

“Our bosses wanted to understand the situation in various stores (across the country) but realized they couldn’t due to quarantine requirements,” Zhang said.

The company eventually shut down its offline operations and Zhang left.

About 1.3 million entities canceled their business registration in China in March alone, a year-on-year spike of 24 percent, official figures show.

With President Xi Jinping repeatedly backing the government’s zero Covid strategy, observers don’t expect authorities to deviate from it even as the economy suffers.

But the restrictions have made life unbearable for some.

“Working from home, especially in an industry like ours known for its overtime practices, has blurred the lines between work and private life even more,” said Ning, who works in marketing in a tech company in Beijing and gave only his last name.

The 26-year-old usually left work around 11 p.m.

But his hours have been extended beyond midnight and into weekends after the capital ordered people in his district to stay at home last month as Covid cases surged.

“I was too exhausted and quit my job,” Ning said.

Since then, he has submitted more than 200 applications. Only three of them resulted in job interviews.

“The situation is grim,” Ning told AFP. “But we will have to find a way to survive.”


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