Another tumultuous week in Beijing is behind us, and we are seeing a great deal of positive signs, though some indicators are going in the complete other direction. While the back-to-work efforts are making excellent headway (with some estimates putting 90-95% of China’s large manufacturers back online), the travel policies continue to tighten as the number of foreign cases of COVID-19 escalate. China has closed the borders to all inbound travellers holding foreign passports, including those with residence permits or valid visas. For example, should I personally have left China during the outbreak, I would now no longer be permitted to re-enter, despite being the Chief Representative of a legal entity that holds a permanent address here in the capital. Those that did manage to enter China ahead of the Friday night cut-off are completing 14-day quarantine periods in assigned hotels at their own cost, and not even necessarily in their destination city. All that is to say — travel to China is going to be essentially off the table for the foreseeable future. However, this preservationist shift in policy is protecting China’s advances, and finds them further along the road to recovery and economic activity than virtually any other country affected. So, knowing that China is essentially back online and likely to be a growth market in 2020 compared to the rest of the world, how can your business keep the tea hot while we continue to fight this battle in Canada?

Last week, five Canadian Chambers across Asia collaborated on a webinar that featured some commercial survival strategies on coping with the COVID-19 situation. The overarching business continuity play that continues to be pressed by expert consultants is that of ensuring positive cashflow. An interesting method of doing so in China that may not have occurred to entrepreneurs is to review your registered capital requirements in your business — the policies on the previous minimums on the dedicated amounts that were required for many years have drastically changed, and you may be sitting on untapped cash. Another potential liquidation strategy is sale of idle fixed assets, or to drive some quick revenue, consider short-term COVID-19 related discounts for advance purchases. Many businesses are being relieved of their VAT obligations for the first six months of 2020. This offers an opportunity to present pre-sales based on that stimulus.

Companies that are fortunate enough to have the financial latitude to expand in China should seriously consider doing so now. Vacancies throughout the country are going to be at record highs in the near-term, and tenants should expect a fair amount of leverage when negotiating. Across tier-1 and -2 cities, especially in office towers, there are still innumerable companies that have been unable to properly restart the fires and will almost certainly renege on their rental commitments. There are also many stories of landlords that have not had the foresight to offer rent relief and provide a short moratorium for their stronger clients, which, of course, results in insolvency and a lost tenant. These landlords will be facing a dire buyers’ market in the months to come in the supply-saturated system. Another advantage for swift movers will be availability of talent, as SMEs and industry-specific blue-chip companies that can’t survive the drought lose capable, qualified staff and the domestic talent pool will be even deeper. If you were considering a new hire in China, the next quarter is ideal, and keep in mind CCBC offers a suite of HR services through our Business Incubation Centres in Beijing and Shanghai.

Two further options during a period of remote work in Canada and steady growth in China: a deep dive on your online presence and supply chain health. Embracing China’s digital world could not be better timed – more consumers and sales leads are searching for opportunities online than ever. Do you have an active WeChat and Weibo presence? These vehicles have relatively low barriers to entry, and content partners are desperate for new customers in this market. Alternatively, apps like BiliBili and DouYin are also immensely popular and can revolutionize a brand overnight. At the very least, consider investing in a translated version of even select parts of your website. On the supply chain side, there has never been a more critical juncture to review your reliance on upstream SMEs. A China+1 strategy is helpful (several companies are already opening up satellite production in SE Asia or other markets), but remember the verticals will still likely include China in this day in age, and understanding your partners capabilities is a responsible play while potentially researching larger, more established vendors. Pricing negotiations will likely tilt in favour of the buyer these days, so consider making moves now. Reach out to your area CCBC Chapter Director if you’d like us to assist in locating partners in China, including recommending new e-commerce and digital marketing firms or sourcing alternative suppliers.

It is estimated that China is at least six weeks ahead of North America on the COVID-19 progress map, assuming strong countermeasures continue to be observed at home. I wish you and your teams’ safety and sanity during these challenging and often frightening times, but as they say, fortune favours the bold. I find inspiration that the Chinese word for “crisis” (危机) can be interpreted as a combination of the words “danger” (危险) and “opportunity” (机会). Myself (Noah[at]ccbc.com.cn) and my colleague Edward Dai (Edward[at]ccbc.com.cn) in Shanghai are available at any time to help you identify and action these opportunities.