Some industrial cities on China's coast are starting to ease restrictions on people and traffic movement, after weeks of stoppage in a bid to contain the coronavirus outbreak. China's containment measures include prolonging the Lunar New Year holiday, quarantines, and restricting travel in large parts of the country.
The measures have paralyzed business activities in China. Companies are struggling with worker shortages as they are unable to return to work. Logistical bottlenecks also render manufacturers unable to receive raw materials and deliver finished products to their customers.
In southern Guangdong province, Foshan and Zhongshan have lifted a requirement for companies to seek approval before resuming their activities. Businesses in both cities are no longer required to show proof of health for their returning employees. The two cities are home to many electronics and household appliances manufacturers.
In eastern Zhejiang province, Hangzhou and Ningbo also ceased the approval process for businesses to resume their operations. The city of Taizhou organized several planes to pick up its workers from their hometowns such as Chengdu, Kunming, Xian, Chongqing, and Guiyang.
Analysts from Morgan Stanley said only 60-80% of production activities in China had resumed and expected a full recovery to take place by mid-to-late March. They said disruptions would extend to the second quarter if the virus could not be contained in the next two weeks.
The epidemic has weakened consumer spending and hurt China's services businesses such as hotels, cinemas, restaurants, and travel agents. The automotive industry also expects a 10% slump in sales in this year's first half due to the virus.
Foshan will roll out stimulus measures to revive consumption. The city plans to offer subsidies of CNY 3,000 for a car replacement and CNY 2,000 for a new vehicle purchase.
