Many businesses across China are set to remain closed on Monday, despite the government’s efforts to restart the world’s second-largest economy following the deadly outbreak of coronavirus.
China’s State Council has urged critical industries — such as aviation — to resume operations as soon as possible, and most provinces have asked local businesses to reopen on Monday following an emergency 10-day extension to the annual Lunar New Year holiday.
Many cities, led by Beijing and Shanghai, are encouraging people to work from home, while some of China’s biggest technology companies, such as Alibaba and Meituan, have extended the holiday break to February 16 or later.
Alibaba said in a memo seen by the Financial Times that it would delay its plan to open tomorrow by “at least a week”.
Foxconn, China’s largest employer and Apple contractor, will not resume production at its iPhone production plant in Zhengzhou, Henan province, according to Jin Boyang, a member of the local epidemic control committee.
Foxconn was not immediately available for comment.
Some regions, including Heilongjiang province in northeastern China, have told employers in cities particularly hard-hit by the disease to extend the holiday break by another two weeks.
The death toll from the disease rose to 815 over the weekend, according to Chinese health authorities, exceeding the 774 fatalities caused by Sars — a similar respiratory disease that paralysed parts of the country 17 years ago. Confirmed coronavirus infections now stand at 37,612, or almost five times the number of Sars infections.
The virus has sent shockwaves through the global economy, rattling financial markets and putting supply chains under severe pressure. Fiat Chrysler warned last week it may be forced to halt production in Europe after struggling to source parts from China, while copper, oil and gas prices have all been hammered by the threat of a prolonged slowdown.
The outbreak could sink Beijing’s hopes of setting this year’s economic growth target at about six per cent. There is rising speculation that the National People’s Congress, where the growth target is announced every March, will have to be delayed.
The epidemic may also prevent China increasing purchases of US goods and commodities by $200bn over the next two years, compared to 2017 levels, as agreed in its recent “phase one” trade deal with the US.
While the Sars epidemic of 2003 had a higher fatality rate, killing about 10 per cent of those affected compared to two per cent so far for the coronavirus, the latter is far more infectious and has — unlike Sars — forced the shutdown of the largest cities in all of China’s 33 provinces.
Many companies, especially those with large workforces, will not reopen tomorrow for fear of new outbreaks emerging.
Ian Lipkin, an epidemiologist at Columbia University and one of the world’s leading “virus hunters”, told reporters on Sunday that trying to balance public health priorities against the need to end economic hardship was always difficult during epidemics.
“If there’s a bump [in infections] when there are people coming back to work then we’ll know we’re in trouble again and will have to back off,” said Prof Lipkin, who was recently in Beijing and Guangzhou for consultations with Chinese government officials on the coronavirus. He also advised them during the Sars outbreak.
According to one worker at a tyre factory in Mudanjiang, Heilongjiang, his company had recently resumed operations but was forced to close after two employees were diagnosed with the coronavirus.
Schools will also not be reopening on Monday. Nearly all provinces have delayed resuming classes at primary and secondary schools until February 16 at the earliest. Some major regions — such as the coastal economic powerhouses of Shanghai, Zhejiang, Jiangsu, and Guangdong — have ordered schools to close for the rest of the month.
Many restaurants will also remain closed. Yang Linhua, owner of a Beijing crayfish restaurant, said he was prepared to stay closed until March. “No one dares to dine out,” he said.
Additional reporting by Yang Yuan in Beijing