The Chinese government is moving quickly in an effort to limit the virus' impact on an economy whose growth is already slowing.
In a report this week, analysts at S&P Global China painted a grim picture for restaurant, tourism and media and entertainment businesses. They forecast restaurant sales in the first quarter willEven if businesses aren't laying off workers, many people may not be getting paid as much or at all right now.
For Beijing-based fast-casual food chain Chef Tian Express, it's not letting go of any staff at its roughly 400 locations, but workers are just getting a base salary for now, according to CEO Yi Yangchun. To cut costs, he said the company is rotating staff, and is hopeful that orders will pick up — operating sales were 10% of normal levels before early February, and are now 30% and increasing.
But if the virus comes under control around March and it's business as usual in April, then the problem isn't that great, especially since the direct impact is on services, not asset-heavy industries, pointed out Chen Xinyi, banking analyst at China Asset Management Company. She added that if the virus is under control by March, then the financing needs of manufacturing companies aren't that great.
For now, he said, there's a clear decline in market vitality, with a drop in property visits, contract signings and construction, and the uncertain environment is causing companies to be more conservative.
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