COVID-19: Lessons from China's recovery - Blog | Efficio US

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COVID-19: Lessons from China's recovery

Words: Ben Lambert

The price of liberty is eternal vigilance. - Thomas Charlton

China is back. That’s the clear message that President Xi is sending, with offers of medical help, protective equipment and much more to Europe, Africa and even the USA. It’s seen in the data too, from traffic, steel demand, and electricity. China has had multiple days of only imported cases of coronavirus, and in Wuhan they can now move around the city – although many people’s first trip is to a morgue. 

However, business under coronavirus is not the same as life before. Foreign visitors are banned in order to reduce the risk of re-infection. China still has some internal barriers, requiring quarantine periods as people move from one country to another. In a country where airport-style security checks to use the metro were already in place, I’m sure authorities are actively monitoring for any sign of re-emergence, and that the reaction will be swift – both to minimise and localise the impact of any new waves. 

What does this mean for businesses and supply chains? 

Firstly, it’s encouraging that China has seen a ‘V’ shaped recovery on many indicators from the first wave. Demand still seems reasonably strong – property sales have bounced back. Its supply chains have re-activated, no doubt helped by strong government and banking support through the crisis. Foxconn plans to be at full capacity by around now. Shipping lanes are filling up again. 

But this is not a full return to business as usual. Education has still not fully re-opened, with knock-on effects around the economy. Even where restaurants are reopening, people remain cautious, and some authorities have limited capacity by 50% to support social distancing. The first snowstorm has passed, but it is still winter.  

Businesses in China, and soon elsewhere in the world, are adapting to a new way of doing business. Many companies have had a near death experience over the lockdown. New precautions to protect business continuity are widespread, be they travel restrictions, enhanced cleaning or new delivery models. Enhanced monitoring of supply chains for continuity and financial instability is a business advantage – the risk of a second wave is high, and business will need to be able to react. Now, as the acute phase passes for China, it’s time to prepare plans to mitigate the next wave. 

The price of liberty is eternal vigilance.  
 

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