Service sector in China is recovering after COVID restrictions
2022.12.29 01:05
Service sector in China is recovering after COVID restrictions
Budrigannews.com – Jordan Li, the proprietor of a restaurant in the city of Chengdu in the southwest of China, is fervently hoping that the Lunar New Year celebrations that will take place next month will enable him to make up for business that was lost this year due to travel and other restrictions related to COVID.
Li believes that people will still travel to Chengdu despite the sharp increase in infections since the central government lifted most of its pandemic control restrictions this month. He imagines a different issue: a lack of personnel to meet the demand.
Li says he is planning for a worst situation imaginable in which he without any help keeps his eatery open as he “can be the chief, the culinary specialist, the server and handle the funds all simultaneously.”
He is irritated by the numerous disruptions caused by the pandemic to his business over the past three years and does not want to hire staff until things get back to normal.
China’s crucial services sector faces challenges betting on a revival after COVID, as Li’s situation demonstrates.
Representatives from the services industry claim that frequent lockdowns have prevented them from expanding due to the virus’s unchecked spread across the country at this time.
They also have to deal with an increasing number of sick employees, especially before and during the Lunar New Year next month, when millions of Chinese people travel a lot to celebrate with their families.
Among China’s anti-virus restrictions, which restricted travel and shut down many restaurants, the contact-intensive services sector, which accounted for 53.3% of GDP in 2021, suffered the most.
This month, almost all of these restrictions, which have hurt the $17 trillion economy, were taken down in Beijing.
Dan Wang, chief economist at Bank China, stated, “There is still a shortage of labor in the services sector in the big cities, and the loss of productivity is quite obvious.” That situation won’t change much before Chinese New Year, and the rebound is happening city by city, not simultaneously.
Due to concerns about COVID and increased spending as a result of the pandemic, ordinary Chinese and travel agencies predict a return to normality will take months.
Zhou Weihong, deputy general manager at Spring Tour, the travel division of Shanghai-based Spring Group, adds, “It’s hard to say how much demand there will be for travel during the Spring Festival because it depends on whether people can recover in time.”
In light of widespread weakness in the services sector, retail sales, a key indicator of consumption, decreased by 5.9% in November compared to the previous year, and catering sales decreased by 8.4%.
The impact of a slowing economy on unemployment and wages is expected to keep a lid on services spending in the near future, despite policymakers’ plans to revive consumption and investment.
Since pandemic control measures were implemented three years ago, approximately half of the shops and restaurants in Lijiang city, a popular tourist destination in the southwestern Chinese province of Yunnan, have closed.
Remaining in a little, void eatery this month after controls on homegrown travel were lifted, its proprietor, surnamed Wen, said business had been terrible during the pandemic. There were little possibilities for a recovery, he said.
He stated, “It’s not the COVID restrictions that stopped people from coming; people don’t have money.”
In addition, in recent days, a lot of shops in Shanghai, Beijing, and other places have closed because employees were unable to come to work. Some factories have already put many of their employees on leave for the Lunar New Year holidays.
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The absence of sound laborers has likewise prompted significant delays for conveyances in significant Chinese urban communities.
“We’ve as of late enrolled two new individuals, however selecting is difficult,” said Seven, supervisor of a Blue Frog eatery establishment in Beijing’s Chaoyang locale, the capital’s most terrible hit in the new Coronavirus wave.
“Even though the pay at our restaurant is quite good, people are still worried about getting sick on the job because the cost of living in Beijing is going up.”
There is still hope, according to some in the service industry.
After the announcements of relaxed COVID rules, a senior executive at a hotel chain with more than 600 properties in China said the company was “confident that Lunar New Year is going to be great.”
According to the executive, the chain is currently working feverishly to “adjust to the new policies” in preparation for the holidays.
