According to data from DXY (Chinese name 丁香园), 24 February at 18:00, there were 77,262 ill citizens, 2,595 deaths, and 24,758 patients cured. The COVID-19 is impacting the Chinese economy.
The outbreak and the measures undertaken by the Chinese Government to contain it are already resulting in business disruption for numerous companies. The outbreak has restricted trade movement to and from China, which have affected business sectors such as transport, manufacturing, F&B, and hospitality. Based on our experience of previous outbreaks such as SARs, the impact only promises to worsen.
Overseas businesses are also concerned with the situation. Many companies are being affected as the country’s biggest trading partner, China, struggles with this unexpected and complex situation. Professionals from numerous industries foresee global economic impact. Worldwide business representatives are highlighting a drop in business due to misinformation and fear around the COVID-19. Yet, the continued growing number of confirmed cases in different countries continues to be a cause of concern.
Industry asks governments for support
During the past five weeks, our worldwide pool of clients has expressed to our professionals that they wish to see from both company’s national origin governments and Chinese authorities the implementation of concrete measures that support to overcome the adverse impact of supply disruption, short-term liquidity and cash-flow, employees returning to work, etc. Some of the measures commented involve supporting with rental rebate, assisting with social responsibility costs (e.g. engaging more cleaners and administration staff to compile with sanitary mandatory compliance), providing subsidies, encouraging domestic manufacturing, and reducing or removing high customs duties imposed on certain products that need to be sourced from other markets than Chinese now.
The potential business disruptions from the outbreak cannot be underestimated given the importance of Chinese exports, labour and demand for goods to the global economy.
During these weeks, our team did not stop supporting both foreign and Chinese companies regarding the risk management measures that they must consider now and for future occasions. Among those measures some of them are as follow:
-
Engage with safety managers and ensure there is continual and ongoing communication with employees, providing updates on the outbreak and training refreshers as required.
-
Conduct risk assessments considering factors specific to suppliers and working conditions.
-
Look across the company’s supply chain to determine whether its suppliers have facilities that might be impacted by COVID-19 and consider contingency plans.
-
Audit suppliers and review their respective work health and safety systems and policies, ensure they are appropriate or require compliance with applicable company policies on the subject.
-
Actively manage and monitor company’s liquidity and project their likely working capital needs.
-
Review all of company’s debt funding agreements to ensure that they do not contain triggers that could result in credit lines being curtailed or terminated.
-
Insert express infection disease/epidemic wording into new contracts and amend existing contracts if possible.
-
Check the terms of existing contracts for protection including force majeure clauses (See FORCE MAJEURE AND CORONAVIRUS).
-
Review the applicable force majeure provisions to determine what the provision allows and whether the current situation is covered. Provide or obtain as much information about the specific force majeure claim as possible (See FORCE MAJEURE: IMPACT ON INTERNATIONAL CONTRACTS).
-
Check insurance arrangements. Pay attention where cargo is delivered to an interim port or to some other port.
Research and measures to be taken
Under current conditions, A&Z team is researching the impact of COVID-19 situation on businesses. By using a survey as a quantitative research method, we wish to examine the impact of COVID-19 situation on not only our clients’ businesses, more broadly retrieve the latest insights in business developments, how companies have been affected, as well as are already grappling with and addressing the many issues being uncovered.
With the information, treated confidentially, our professionals will be able to deepen knowledge and adapt response to support companies by identifying creative solutions that may enable companies to overcome barriers, mitigate actions, and even identify business opportunities. A briefing of the results will be shared with respondents leaving contact details.
A&Z research and CRM team will appreciate your contribution to answering the following 10-question survey. It will only take 5 minutes of your time!
Answer by clicking the following URL:
URL:https://www.surveymonkey.com/r/C6GLFPK
