A New Year brings a new COVID policy in China. The Middle Kingdom is finally opening up travel both within the country and to outsiders. While this is certainly good news for China and businesses everywhere, it is still better to hold off on any trips to China for business in the near future.
The Zero Covid Policy
Under President Xi Jinping, China instituted a Zero COVID policy almost immediately after the beginning of the COVID pandemic. The policy was one of the strictest in the world. Cities would lock down after one or two cases were detected. International travel was highly restricted, PCR tests were widespread, and contact tracing was rigorously adhered to. Vaccinations were extensive (though not super effective), and the government provided material incentives to counter vaccine hesitancy (though these have reduced quite a bit).
The policy seems to have worked well: China had far fewer cases than other large countries, especially the United States. As of January 2, 2023, there have been 31,585 deaths in China and 10M confirmed cases. It should be noted that these are official numbers and could be much higher. During this same time, the United States had almost 100M confirmed cases and just over 1M deaths.
These measures were initially popular in China and helped bolster the legitimacy of the government’s response. However, by 2022 the cracks were beginning to show. The lockdowns, overzealous enforcement, and restrictions started to strangle the economy (GDP shrank by 2.6%) and test the population’s resolve. Eventually, mass protests erupted throughout the country.
China Finally Opens Up For Travel in December 2022
The country began to open up in early December 2022 and since then the virus has ripped through the population as nearly all restrictions have ended. Our staff has reported callouts at a minimum of 20% and well over 50% in other places. At the same time, it has become easier to travel to China over the past few months and people are able to travel internally. The infections will, hopefully, decrease and stabilize over the next few months.
What This Means For Your Travel to China
Policies have changed rapidly and will continue to evolve. However, the situation is radically different than it was 2 months ago. Renaud Anjoran has written an excellent article at QualityInspection.org on the short and possible long-term effects of this change in policy. Here are a few of the highlights.
1. Mandatory quarantines have reduced from 10 days to 5 days and will soon not be required
The requirement to stay at a Chinese government hotel with no human contact was a strong disincentive even for people that received business visas. Domestic routes will continue to open up and more people will travel.
2. Restrictions might go the other way
While it is easier to go to China now, the spike in cases (and Mr. Anjoran’s graphic example in his blog) may make it difficult to return to your home country. Japan has already started to implement basic protective measures while Germany is contemplating creating similar policies. It would not be a surprise if other Asian countries started to follow Japan’s example.
What Now?
We would urge you to rethink travel to China for immediate practical reasons and for long-term systemic reasons.
1. It is best to wait until after the Chinese New Year at least.
The number of COVID cases will likely worsen as millions of workers return to their hometowns for a holiday. Chinese hospitals are already overwhelmed, and the situation will not improve as internal travel increases 100-fold. Being stuck in a very crowded Chinese hospital is likely worse than quarantine.
2. This is a good time to think about how you do business in China and if the previous methods are worthwhile.
It is likely that many people reading this blog have travelled to China many times and are eager to return to check on their factories and suppliers. You know exactly what you want to do and handle 3+ years of built-up frustrations and challenges.
However, we urge you to wait and think before booking that flight. Now is an excellent time to ask yourself if these trips are worthwhile and if the best solution to your challenges is to travel to China to sit in your supplier’s factory and push them in person to meet your goals. We have seen many companies travel to China to harangue their suppliers and achieve some success. They only return to their home country and see the situation return to how it was before they travelled. They become frustrated and plan their next trip or look for a new supplier just to do it again.
Maybe this cycle does not reflect your situation, but I am willing to bet that many of you find elements of truth in it. Now can be the time to rethink how you do business in China. Maybe there is a better way to improve your supplier’s operations. Maybe it is time to move, at least de-risk operations in China? Perhaps it is, perhaps not, but it is time to ask those questions.
The Bottom Line
The macro-economic situation has changed a great deal in the past 3 years and opening in China is not going to change that fact, so it is short-sighted to just go back to the way things were before COVID. Analyze your situation and your goals and think about your opinions. We would be more than happy to discuss them with you.
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