When nCoV spread at a "dizzying" pace, many local governments in China restricted businesses and trade in crowded places to prevent the deadly virus.
According to the South China Morning Post , if nCoV is unregulated in March or April of this year - the time when some foreign businesses plan to order goods for the end of 2020, then maybe the water enterprises outsiders will seek suppliers outside of China.
Liu Kaiming, head of the Contemporary Observatory, warned that if the acute respiratory infections were controlled by the end of February, the impact on the manufacturing industry would be manageable. If the virus situation persists through March, Chinese small and medium enterprises will be seriously affected.
Liu Kaiming stressed that the corona virus’s "manipulation" could be a "fatal blow" to many manufacturers in China. Moreover, China’s supply chain and its status as a "world factory" may also be lost by the acute respiratory infection caused by nCoV.
According to the Nikkei Asian Review, Ftech, a major supplier to Honda’s car manufacturing facilities in China, is planning to shift its production of brake pedals to the Philippines from Wuhan, the "heart-shifting" city. Honda has three manufacturing facilities in Wuhan, all ordered to close until at least the end of February 10. Many automakers in China have also closed their doors to the current complicated disease situation.
Not only carmakers, Xibei (one of the largest restaurant chains in China with 400 stores in 60 cities, more than 20,000 employees) had to close almost entirely. The outbreak of acute respiratory infections caused by nCoV caused Xibei’s revenue to decrease by about 90% compared to the same period last year.
’’ We have to pay RMB 156 million (about US $ 22.3 million) per month for our employees’ salaries and can only maintain this amount for the next three months. If the corona virus continues to rage through April, we will have no choice but to fire our staff, ’’ said restaurant chain representative Xibei.
In this situation, Peng Peng, vice president of the System Reform Research association in Guangdong, said that the Guangdong government had to act to help small manufacturing companies. The international response to the corona virus outbreak is currently quite intense, so all Chinese exports may be delayed or cut in the near future.
In addition, Mr. Peng Peng also found that many small service companies and restaurants could hardly last more than 2 months in the current conditions.
Tom Wang, who runs a footwear factory in Dongguan City, Guangdong Province, China, said foreign customers would certainly wait to see how the epidemic develops and decide to continue trading. business in China or diverted to other alternative production facilities.
Mr. Tom Wang also said that representatives of a number of small shops, restaurants and local companies said that before the government’s business restriction order, they could only hold out for two or three months before tying. must close.
In Guangdong province, one of the so-called manufacturing hubs of China, small and medium-sized business owners are struggling with rising costs due to the impact of a trade war while preparing for a new recession if the corona virus spread rate does not show signs of decline.
’’ In the first quarter of 2020, order reductions are certain to happen at most factories operating in China. We are afraid the corona virus will infect our factory, so we do not dare to take any big orders in this first quarter, "said Mr. Tom Wang.
Also according to Tom Wang, his business is not confident about the prospects of export orders in the second quarter of 2020. Tom Wang said that the impact of corona virus on small and medium enterprises in China will be much bigger than SARS pandemic in 2003.
Tom Wang stressed that at present, very few small and medium enterprises can cope with the current situation. "Factory rents, workers’ social security, other government fees, as well as operating costs remain unchanged and it’s a constraint for small and medium-sized businesses." , Tom Wang said.
