Tuesday, July 14, 2020

Chinese Firms Race to Contain Job Losses as Coronavirus Batters Economy

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BEIJING—When cameraman Mark Xia returned to his job this month after the Lunar New Year holiday, the Shanghai video production house where he worked told him to take three months of leave with no pay, as a coronavirus outbreak takes a toll of China’s businesses.

Now Xia is looking for a part-time job after the company, with a workforce of about 100, rejected his request to pay at least half his monthly salary during the suspension, and left him no choice but to resign.

“I understand the company’s cash-low is tight,” Xia, 25, told Reuters. “We postponed some shooting due to the coronavirus outbreak, and that’s had a huge impact on our revenues, that’s the reality.”

Xia is one of many losing their jobs in the outbreak, sparking strict travel and movement curbs that have kept many businesses shut, disrupting demand and supply for goods and services.

Many small firms like Xia’s former employer face cash crunches because of a lack of orders, forcing them to lay off workers or dock salaries to keep afloat.

But the outbreak has yet to show signs of peaking.

Any rapid rise in unemployment could pose a big challenge to China’s stability-obsessed leaders, with growth in the world’s second-largest economy already slumping to near three-decade lows.

Just 34 percent of nearly 1,000 small and medium-sized firms said they could survive for a month on current cashflow, a recent survey by Tsinghua University and Peking University showed.

A third said they could last for two months, while 18 percent said they could stick it out for three months.

“There could be big layoffs,” said Wang Jun, Beijing-based chief economist at Zhongyuan Bank.

“I think it’s more appropriate to compare the current impact to the global crisis, instead of that of SARS,” he added, referring to the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2002 and 2003.

Epoch Times Photo
A man wearing a face mask rides an escalator at the Lujiazui financial district in Pudong, Shanghai, China on Feb. 10, 2020. (Aly Song/Reuters)

Mass Layoffs?

During the global financial crisis of 2008 and 2009, about 20 million Chinese…

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