Normal life remains elusive as residents and businesses grapple with ongoing restrictions.
A viral post on Chinese social media recently pointed out that it has been nearly 900 days since the WHO announced Covid was a pandemic and China’s borders closed to international travel. Now, as we move into the second half of 2022, China is still trying to stamp out every appearance of the virus, relying on its playbook of mass testing and tough lockdowns.
However, while these techniques have had their benefits—stamping out small outbreaks before they spread—the costs and impacts of these policies seem only to be increasing, as businesses nationwide and residents of locked-down cities struggle to cope.
Shanghai, the country’s biggest financial hub, endured two months of near complete lockdown after case numbers there rose into the thousands in April. The majority of businesses shuttered and over 20 million people were stuck at home, haunted by the specter of testing positive and being shuttled to mandatory quarantine in hastily constructed facilities. Beijing followed into lockdown soon after, though its measures weren’t as severe. Many indoor activities were forbidden for around a month, including all restaurant dining. Ride-hailing on the popular app Didi was also suspended.
The prolonged lockdowns and restrictions have negatively impacted China’s economy, which expanded just 0.4% in the second quarter, the slowest since the pandemic first hit the country, the National Bureau of Statistics said in July.
Official consumer confidence figures have fallen to their lowest on record. Retail sales fell by almost 10% year-on-year in real terms in May, after declining by 14% the month before. Spending on catering shrank by more than a fifth. Home buying fell by over 30% in the year to May.
While reports from mainstream Chinese media usually make it seem that Shanghai has mostly gotten back to normal since June 1, the view from the ground often looks quite different.
“We still have to do a Covid test every single day, and residential communities still issue daily passes to get in and out, only if you have a valid test result. Workplaces require the same,” said a person working at a Shanghai-based state-owned construction company, who spoke on condition of anonymity. “Even though we can move freely, our options are fewer than before. So many shopping malls and restaurants are permanently closed, even the local IKEA.”
Resurgent flare-ups of Covid mean some segments of the city are back in lockdown. According to a report from financial media giant Caixin, residents of over a dozen neighborhoods across two major city districts were ordered to stay in their homes this week.
“We are too burnt-out to complain,” said the person. “The rules are so strict and ruthless. We can only do as we are asked to avoid trouble. I’m not afraid of the virus, but I am under pressure from outside, like being sent to a quarantine hospital or being treated as an enemy by my neighbors because any positive case will put them into lockdown again.”
“Now we are using animal instinct to survive these measures—as long as you let me eat normally and stay alive, I’ll do whatever you ask.”
While many of Beijing’s pandemic control measures have eased, some requirements—such as requiring a recent Covid test result to enter public spaces—seem to have become permanent. Entertainment venues like KTVs and live music bars still remain closed.
Perhaps the most welcomed relaxation of the strict Covid rules was the reopening of restaurants.
“There are queues every day this week,” an owner of a Beijing-style BBQ restaurant in Dongcheng district, the center part of the city said with a grin. “But I don’t know how long this good business will last. Who knows when the next snap lockdown will be? We can only take it one step at a time and try to recover our losses little by little.”
As a result of Beijing’s most recent Covid restrictions, the restauranteur lost nearly 300,000 yuan ($45,000) to rent, salaries and utilities. During that time, he had no income as his restaurant’s cuisine requires a special grill on which to sizzle belly pork, lamb and vegetables. He had steeled himself for his business’ collapse if the lockdown had stretched a month longer.
There are no official statistics about how many private businesses permanently closed in locked-down cities since the start of the year. However, urban unemployment among those under 24 has hit a record 19.3%, representing about 15 million young people. Most are fresh college and vocational school graduates, according to a July 25 Bloomberg report. They’re entering the toughest job market in a generation, competing with experienced workers laid-off from struggling companies in the property, internet and education sectors. These sectors once offered huge numbers of job opportunities to young people, but are now limiting recruiting after a sweeping regulatory crackdown last year.
While the central government has ordered the state sector to increase the hiring of fresh graduates, some major firms have admitted they’re still struggling to find people to work for them.
“We haven’t received many applications no matter how good the salary is. Young people wouldn’t like to start careers on construction sites or manage projects in developing countries like Africa. In fact, fewer and fewer students choose civil engineering as their major in school. The job market is unbalanced,” the state-owned company staff said.
Small and micro business owners in lower-tier cities are also trying their best to fill their workers’ wallets and keep operations going during the uncertainty. The owner of a chemical fertilizer factory in Hebei, a province in northeast China, shared how a month of lockdown pushed his business near collapse in early 2021. His 30 employees were forced to stay in the factory until officials lifted restrictions on movement.
“Staff being quarantined in the factory were still able to produce goods. The nightmare is the whole area here was blocked for 40 days. Trucks carrying the raw materials couldn’t drive in, which resulted in insufficient supplies for the production. Then we had to stop the operation and this has brought the biggest loss.”
Small and medium-sized businesses normally have only a small capital reserve, and therefore their ability to weather a crisis like these prolonged shutdowns is weak. Once the cycle of input and output is broken, businesses like the one in Hebei usually end up with significant debt, consequentially leading to bankruptcy.
“We are now trying to produce fertilizer as fast as possible to stock up. We encourage our workers to work more with some financial incentives. However, if there is another lockdown, the only thing we can do is to just obey the government’s rules, wait and hope.”
All three of the interviewees above mentioned the Communist Party’s upcoming 20th National Congress, where China’s most senior leaders will assemble in Beijing this fall. The event is expected to result in an unprecedented third term for China’s President Xi Jinping, who will ultimately decide the country’s policy trajectory over the next five years.
“We are expecting that after the congress is successfully held, the zero Covid policy could be eased, and they could come up with more practical methods to deal with the pandemic. Maybe finally at the end of this year, we could co-exist with the virus,” the person from Shanghai said.