Despite Covid spikes - 1.7 billion trips expected
By Line Heidenheim Juul
Chinese new year is coming up this week, and local authorities expect a staggering 1.7 billion trips to be made, despite new covid19 spikes in the recent month. Local authorities report that the situation is under control, although they strongly discourage travel and has tightened rules on testing and quarantine.
The total reported deaths and cases in China are still low in global comparison, and rules are currently subject to constant change. In Shanghai, life goes on as restaurants, shops, offices, and leisure activities are open for the upcoming holiday.
Still open for business, but controlled
From early spring 2020 and going forward to the initial roll out of the Covid19 vaccine in December, society has felt almost normal in Shanghai. The malls have been open, the restaurants busy and the office spaces brimming with activity. Even domestic travel has been up significantly hitting index 98 in the fall. Travelling from Shanghai to Beijing merely required a green health code (read more about that here). The annual GDP growth has been hit hard, but is estimated to grow 8 percent in 2021. Much of the success in fighting Covid19 has been attributed to quick and decisive action after the virus was uncovered. The government has even declared victory last year. But this January China reported more than 2000 new cases, which is the highest number since May.
Though most cases emerged in rural areas in the North, there have been a handful of cases in Shanghai too. Cities in Hebei province and areas of Beijing were locked down, limiting the mobility of millions of residents. This has immediately caused a tightening in control, and various cities has required both a negative Covid19 tests at least 7 days ahead of travel as well as quarantine on entry to other cities and provinces as well as on return. It seems very clear that no chances are to be taken, and the authorities now again focus on quick and decisive lock down in affected areas to maintain general stability at any cost.
Nobody move!
The situation in Shanghai is stable, but it is clear to see the tightened regulation and precautions. Beyond the mass temperature measurements and health code checks at major hubs, the state-owned companies and many private companies are putting pressure on employees to stay put and not return to their hometowns for Chinese New Year.
Companies send out daily reminders with messages suggesting that it is irresponsible to travel, and managers are required to approve any employees return home, while also assuming the responsibility of the potential consequences. In some areas, like Hangzhou, the government is offering migrant workers and others 1000 RMB ($154) to stay put.
Other work places require daily temperature check in online, even during holidays, and have warned employees that they may have unpaid quarantine of up to 21 days if they leave the city. These seemingly harsh methods are similar to last year´s, which secured Shanghai a mere 3-4 weeks of partial lockdown before things returned to “normal” for the rest of the year.
Unlikely 50 million vaccines before Spring Festival is over
With a sudden and fast increase in local cases and the largest human migration a week away, it begs the question how far China is with the vaccine roll out. Sinovac and Sinopharm were quick to reach phase three in clinical trials and China announced early that roll out would start in December 2020. By now, 31 million vaccines have been administered nationwide, according to Bloomberg´s Covid19 tracker. That is slower than expected and may mean that China cannot hit the promised target of 50 million vaccinated citizens by February 15th.
One of the reasons for the slow roll out is that the Chinese vaccines are slower to produce, but also that China is exporting 400 million doses to other countries. (Read more about the vaccine diplomacy here) In addition to slower roll out than expected, the Sinovac vaccine has now also been estimated to offer only 50% protection against Covid19, in comparison to estimates of Sinopharms 79% and Pfizers 95% protection.
Ecommerce to the rescue
With no vaccine, no travel plans and no gifts to bring home to the family, the usual expenditure extravaganza is expected to be lower in a time where the government desperately encourage domestic consumption. The ecommerce giants Alibaba, JD.com, Pinduoduo etc. are naturally ready and ramped up to step in, as the government has asked them to maintain normal operations during the holidays.
Many people are not travelling home to the usual family reunion and traditional home-cooked dumpling feast, so restaurant chains and tech giants are teaming up to fill the void. Popular restaurant chain HaiDiLao is working with Huawei to let families connect from different city locations and share a similar meal on each side of the screen. Others are simply offering a single-person New Years Feast meal-package, for those sitting alone on New Year´s.
Last year, the massive and quick lockdown in Wuhan showed the power of the ecommerce player´s mature and substantial supply chain network and tech solutions. Robots and drones sent out food and messages, and citizens could order necessities as well as leisurely gadgets with fast delivery. Besides this, the ecommerce players were quick to help local farmers board platforms and provide additional sources of produce in less developed areas. As the government and companies are strongly encouraging workers to stay put, they will need to rely heavily on the ecommerce for basic necessities and increased domestic consumption.
Will China open for travel (and tourism) anytime soon?
Not likely. While Covid19-case numbers are always somewhat uncertain, the total reports from China are still quite low compared to other countries. The total deaths in China has not yet reached 5000 and total registered cases is just around 100.000, according to WHO. That does not mean we will see an opening up any time soon.
With domestic consumption and travel being a key driver of the Chinese economy, there seems little reason to risk opening up for international tourism. Opening up will depend on vaccine roll out and on the global Covid19 situation.
