Source: British Chamber of Commerce in China
British Chamber of Commerce in China
The British chambers of commerce in China have conducted a second survey on the impact of COVID-19 on our member companies. The initial survey measured sentiment as companies returned from the Lunar New Year holiday between 5th and 7th February. This survey, conducted between 18th and 21st February, provides an updated picture now that businesses have had time to better understand the impact of the outbreak on their operations.
Key Survey findings:
Half of British businesses expect their 2020 China revenue to drop by more than 10% as a direct result of the COVID-19 outbreak, and more than one quarter of British businesses expect a decrease of more than 20%. Companies headquartered in Wuhan, as well as those in the creative industries and hospitality, expect the biggest negative impact on their revenues.
Companies are most affected by reduced demand for their products and services (61%), global travel disruptions (58%), and business uncertainty (55%). The proportion of companies experiencing these challenges has risen significantly since the initial survey two weeks ago, highlighting that the impact on businesses is far more severe than first anticipated. 55% of British businesses’ offices in China remain closed, and 91% of British retailers have seen a drop in demand as a direct result of the outbreak. In response, the majority of companies are implementing remote working (86%) and flexible working hours (60%), and roughly one third of businesses are postponing investment decisions.
The predominant concerns for businesses for the next six months are continued travel restrictions (69%) and reduced consumer demand (63%). For companies in Wuhan and Hubei, the most widespread concern is public health and sanitation (60%), whereas companies headquartered in Beijing, Shanghai and Guangdong are more concerned about travel restrictions, reduced demand and reduced attractiveness of the Chinese market respectively.
SMEs are significantly more vulnerable to the economic effects of the outbreak than MNCs. 39% of SMEs expect that their 2020 revenues will decrease by more than 20%, compared to 13% of MNCs. SMEs are also three times more likely than MNCs to be postponing investment decisions.
Roughly half of surveyed British companies are contributing to efforts to curb the impact of the COVID-19 outbreak. The proportion of companies providing financial donations and pro-bono business advice have both increased 10 percentage points as compared to the previous survey, and 43% plan to make further donations.
Getting Back to Normal
British businesses have more certainty around when to return to normal. The chart below shows answers to the question "When does your organisation anticipate the situation and your operations will return to normal?"
Simon Says
It's really encouraging to see increasing certainty among British businesses operating in China. Uncertainty can kill business opportunities, and cause distress and depression among managers and workforces. What's undoubtedly helping is the large proportion of British companies actively contributing to the fight against the virus in donations and pro-bono advice. As many a Chinese friend has said to me, "movement is life". It's true for a person, and it's true for a business.