Lockdown is over here, but it is far from business as usual
‘Free rent for a year!” – “Refund our deposits!” – chanted dozens of protesters in Wuhan, ground zero of the coronavirus pandemic. The protesting shopkeepers at one of the city’s largest malls are struggling to survive after they were forced to shut down for months during the outbreak.
Scuffles broke out as police intervened to end two days of demonstrations, according to several witness accounts and videos shared with The Daily Telegraph. All declined to give their name for fear of retribution and state censors have erased any online content about the protest.
“It’s no surprise that there are protests like this after the lockdowns began lifting,” said a sales assistant at a shop overlooking the courtyard where the protesters had been rounded up by police officers.
A lot of the shops have yet to open despite Wuhan’s mass quarantine restrictions officially lifting on April 8. In many cases, employees have not yet returned to the city and businessowners say few people have ventured outdoors for a spot of leisure shopping anyway.
“Even if you do open now, at least for a month or so there won’t be many customers,” said a shop attendant.
Clashes across China underscore the difficult task the country’s government faces in trying to contain social unrest as it endeavours to restart the world’s second-largest economy. Just how far the economy has fallen was revealed yesterday, when Beijing announced its worst economic contraction in decades.
In the first quarter of the year, its gross domestic product plummeted 6.8 per cent.
“We have definitely seen an uptick in the number of protests by workers, including small business owners, asking for rent reductions,” said Geoff Crothall of China Labour Bulletin, an NGO that advocates workers’ rights.
Beijing needs to juggle conflicting priorities: it must continue to urge people to stay at home to prevent a second outbreak and it must maintain social stability; yet it must also engineer a return to work and promote consumption to boost growth.
The risk of instability is growing as companies furlough or lay off workers and reduce wages. Five million people in China lost their jobs in January and February, according to government statistics. Experts think four times that could become unemployed as the year unfolds.
The real rate of unemployment, however, is likely much higher, as millions of migrant labourers in China work odd jobs to make ends meet. They also work without contracts and have not paid into the country’s unemployment programme, which means, if they get laid off, they will not receive any state benefits.
“A lot of people depend on the gig economy. It really is a very day-to-day existence,” said Mr Crothall. “Even if you have a job, it’s probably going to be precarious – one week, you might get paid; another week you might not.”
Taxi drivers, largely unable to work during the coronavirus crisis, have been among the most active of the protesters. China Labour Bulletin has noted 25 strikes by taxi drivers so far this year – compared with 54 for all of last year – primarily asking for fee reductions in what they pay taxi companies and lower insurance rates, or to be able to exit the industry without penalties.
On Monday, a group of Wuhan hotel and apartment rental managers trying to stay afloat – some of whom had offered free accommodation to medical staff – sent a letter to local authorities seeking subsidies, loan guarantees, rent reductions and other incentives they said could help them get back on their feet.
The Chinese authorities – at local and central levels – have announced targeted measures to support small and medium-sized businesses, such as tax breaks and lowering the amount employers must pay for employees’ social insurance.
Loan rates have also been reduced in the hope that banks would open more credit lines for smaller businesses.
“The reality, though, is that banks are very conservative here and don’t want to take that risk,” said Ben Cavender, a principal at China Market Research, a consultancy. “Small business is probably still not receiving the money it needs to keep going.”
About 500,000 companies have already shut down for good, with many more closures expected, delayed only by having to plough through the onerous bureaucracy required to declare bankruptcy, he said.
The government is “going to have to come up with ways to pay workers directly, rather than just giving firms incentives not to lay people off,” said Mr Cavender, or “it’s going to be difficult for a lot of workers to earn the money just to pay the rent and get by”.