Saturday, July 4, 2020

Empty Kitchens, Closed Stores: Small China Firms Struggle to Cope With Epidemic Fallout

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BEIJING—Ma Xinli has shut four of his clothing stores and expects to close another three by mid-June. Unsold winter stock is now hard to sell, there’s no money to buy summer clothing, and rent and staff salaries still need paying.

He doesn’t expect to see any profit this year.

Ma’s is one of many small businesses in China still reeling from a collapse in consumption during months of lockdown.

Efforts to control the spread of the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus, left formerly bustling restaurants deserted and malls shut or empty. Retail sales in March, when much of China had started to return to work, still fell by almost 16 percent year-on-year.

Although crowds are returning to the streets and Beijing has rolled out a raft of support measures—pledging to reduce or exempt small firms from social insurance fees and encouraging banks to lend to them—many stores are now closing under the pressure of rent and salaries.

Customers wearing face masks shop bed linen under business closure notices inside a home linen store whose business has been struggling since the coronavirus disease (COVID-19) outbreak, in Beijing
Customers wearing face masks shop bed linen under business closure notices inside a home linen store whose business has been struggling since the COVID-19 outbreak, in Beijing, China, on April 14, 2020. (Tingshu Wang/Reuters)

About 70 percent of Ma’s business came from tourists, but most visitors to the Chinese capital must still spend two weeks in quarantine on arrival, deterring all but essential journeys.

Suppliers who had previously allowed him to defer payment on new stock won’t do so this year, as they worry he won’t be able to pay, said Ma, who has been in the clothing industry for a decade.

“I’m only praying that I won’t lose too much,” he said. “I don’t see any other way to get through this, except for fighting hard to the end.”

‘Nothing I Can Do’

Beijing is famous for its crispy roast duck, but one restaurant owner, with the surname Li, said he couldn’t fire up his kitchen because the workers he needs to maintain the gas stove were stuck in quarantine.

“I didn’t even shut down my restaurants during SARS,” said Li, who’s been in the business for twenty years, referring to the 2003…

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