Companies in China teeter under zero-COVID pressure

BEIJING, China—Fiona Shi lost her job twice during the pandemic—first, in 2020 when Covid ravaged the travel industry, and then this year as China’s strict virus controls hammered businesses in the world’s number two economy.

China is the last major economy welded to a zero-Covid strategy – putting firms and workers at risk of snap lockdowns, freezing activity in the services sector and tangling supply chains crucial for factories to sell their goods.

As the country battles its worst outbreak since 2020, its urban jobless rate has surged to the highest level in two years and the pain is being felt by both blue- and white-collar workers.

“Many places say they are not recruiting people aged above 35,” said Shi, 38, who pointed to the difficulty of returning to entry-level positions after managerial roles.

She worked in a management role in the hospitality industry in 2020 when the coronavirus brought nearly all travel to a halt as governments imposed social distancing and movement restrictions.

Two years later, the Beijinger found herself in the same position after losing her job at a multinational firm.

“The pandemic has also made it harder... many places have frozen headcounts,” she told AFP. “I’m really anxious.”

Months of unpredictable Covid restrictions—including snap lockdowns and severe travel curbs—have hit dozens of cities from business hub Shanghai to the northern breadbasket province of Jilin.

An American Chamber of Commerce survey released this week showed that almost all respondents cut their revenue projections, while in a separate study 11 percent of European firms said they would downsize their China operations because of Covid measures.

Domestic firms have also been tightening their purse strings.

Ride-hailing platform Caocao Chuxing has let go of staff, with Chinese media reports pegging the proportion at 40 percent.

Some staff at e-commerce giant Alibaba were also reportedly asked to leave, according to state outlet Legal Daily.

Grim situation

The imposition of restrictions to stamp out Covid outbreaks this year has intensified pressure on firms already grappling with a slowdown in the economy and regulatory crackdowns on sectors including property and tech.

Bai, 27, told AFP she was laid off by a US tech company that was preparing to end its business in China.