PSU (China) Consulting CO., Ltd.

PSU Weekly News FlashFriday 22nd May 2020

Last week • Only Beijing, Tianjin, Hebei, Hubei and parts of Tibetremained at epidemic alert status level 2. All otherregions of mainland China were downgraded

• China continued to report no COVID-19 deaths.Clusters of new infections emerged in Jilin, NE Chinaand also reemerged in Wuhan. This is unlikely toaffect broader moves towards normalisation

• The country continued with ‘work resumption’ andnormalising other aspects of society. A reported40% of students had returned to schools in China

• German Chamber of Commerce announceddiscussions underway for a “fast-track” procedureallowing “urgent personnel” to return to China,similar to the recent agreement with South Korea

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Image source: China Daily

Headlines • Four districts in Jilin city, NE China, raise epidemicalert statuses in response to recent infectionsconnected to a COVID-19 outbreak in nearby Shulan

• Origin of Shulan outbreak remains unknown.Infections have now spread to Shenyang, inneighbouring Liaoning province. 8000 people inquarantine due to the outbreak, which looks set tocontinue but unlikely to escalate

• China continues it’s strategy of large-scale testing,now reporting capacity for 1.5 m tests/day. Testingof Wuhan’s entire population (11m+) is underway.As testing increases, rate of asymptomatic carriersin Wuhan has been falling

• In addition to epidemic control measures, security isbeing significantly stepped-up on travel into Beijing,as the ‘Two Sessions’ partymeetings begin

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Image source: China Daily

COVID-19

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• Fengman district in Jilin city, NE China, raises its epidemic alert status tohigh following a handful of “locally transmitted” cases are detected. Fourdistricts in the city have now increased their alert statuses

• The outbreak originating in Shulan city in Jilin province has now resulted inaround 8000 people placed into effective quarantine and medicalobservation at designated facilities in Jilin and neighbouring Liaoningprovince (Shenyang city). Lockdown procedures in-place in Shulan

• The origin of the Shulan outbreak remains unknown. The outbreak looksset to continue but is currently assessed as unlikely to escalate

COVID-19

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• In brighter news, severe COVID-19 cases in Beijing municipality finally dropto zero. No new COVID-19 cases have been reported in Heilongjiangprovince, the focus of previous outbreaks

• On Wednesday, the message from the Party’s central COVID-19 strategygroup was that epidemic control measures had proved successful inhandling large-scale travel over recent Labour day holiday. This raises theprospect of scope for further relaxation of some controls on populationmovement and gatherings, moving forward

• China’s National Health Commission reports that medical services acrossthe country are restored to 85 percent of what they were one year ago

COVID-19

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• Last Friday, the Party’s central COVID-19 strategy group reiterated thattesting remained central to China’s COVID-19 containment and ‘workresumption’ strategies moving forward. Officials called for continuedscaling-up of testing and developing faster and more accurate testing kits.China can now conduct 1.5 m Nucleic Acid Tests (NAT) / day

• Large scale testing continues throughout regions of China. Guangdongprovince conducted over 10 million NATs as of 18th May, and the citycontinues with its program of large-scale testing

COVID-19

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• Wuhan city (where COVID-19 was first detected) continues with itsambitious project of testing the entire population of 11+ million residentsat an estimated cost of RMB 1 billion. Testing will remain free of charge tothe public. The city has already tested 3 million of its residents

• Wuhan officials describe the city-wide testing drive as an investment inreducing fear and discrimination. The city’s current testing capacity isreported to stand at over 222,000 tests / day

International Travel

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• China continues to implement a temporary suspension on entry for allforeign nationals, with, at present, few exceptions

• Last Friday the Party’s COVID-19 strategy group hinted at the possibility ofeasing China’s ban of foreign nationals arriving in the country, “dependingon the pandemic’s situation overseas”, in order to facilitate “personnelexchanges and economic cooperation”

• A charter flight of German business people remains scheduled for 25th

May, destined for Shanghai. This charter flight arrangement may set apresident for further foreign executives to return to China

International Travel

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• Shanghai Pudong International airport has opened two dedicated COVID-19 testing facilities, located in T1 and T2 terminals. The facilities claim toprovide ‘around-the-clock’ Nucleic Acid Tests and are part of the airport’spreparations for resuming increased passenger flows in the future

• State media reports that China’s Civil Aviation Authority has not receivedany orders to resume further international flight routes, despite a numberof international airlines expressing their keenness to resume routes toChina as early as June.

Internal Travel and Logistics

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• Passengers taking trains to Beijing are now facing additional securitychecks, in addition to temperature checks, as the ‘Two Sessions’ annualParty events started on 21st May

• Passengers from Shanghai railway stations, destined for Beijing, will besubject to two-levels of security and temperature checks before boardingFace masks must be worn at all times throughout the journey

• Beijing CDC cautions domestic business travelers to be “vigilant” prior totraveling. Travelers should check if new COVID-19 cases have beenreported in destination towns and cities prior to travel. All business travelto high-risk regions should be suspended

Society

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• 600,000 students from 4th to 7th and 10th grade students have returned toclassrooms in Shanghai. The municipality’s final tranche of students (1st

and 3rd grades) set to return to classrooms on 2nd June

• Mirroring announcements in other regions, the academic term in Shanghaiwill be short. Primary schools will end current semester on 1st July andjunior and senior schools on 8th and 15th July

• The wearing of face masks outdoors is declared as no longer necessary inBeijing, according to official guidance from China’s CDC. While masks areno longer required, the CDC strongly urged people to maintain socialdistancing

Society

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• A range of indoor venues have already been reopened in Guangzhou city,south China. The city has also reportedly announced that it will allow“necessary” conferences and exhibitions to take place

• Guangzhou and Shenzhen also allowing all students to return (in tranches)to classrooms, including university students. Students currently overseas,however, will not be allowed to return to the classroom once arriving inChina

• The wider Guangdong province is also scheduled to allow the reopening ofkindergartens on 2nd June, following prior on-site inspections and approval

Local Business

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• Concerns for many workers that salaries this year will fall short of 2019.Average annual salary for private sector workers increased by 5.2%(inflation-adjusted) in 2019, while the average wage in the non-privatesector rose by 6.8%. Analysts predict the salary gap to widen this year asmicro and small businesses have struggled during the epidemic

• While the rate of work resumption has leveled off recently, it’s reportedthat 99% of China’s major industrial enterprises have resumed operations.95% of employees in these enterprises have resumed work

Summary

• Districts in Jilin city, NE China, raise epidemic alert statuses in response torecent infections connected to an original outbreak in Shulan city. Theorigin of the outbreak remains unknown. The outbreak looks set tocontinue but unlikely to escalate

• ‘Epidemic controls’ were deemed successful (by Party officials) when facedwith pressures of large-scale travel over the recent Labour Day holiday.China continues it’s strategy of large-scale testing, reporting capacity for1.5m tests/day. Testing of Wuhan’s entire population (11m+) is underway.

• In addition to epidemic control measures, security is significantly stepped-up on travel into Beijing, as the ‘Two Sessions’ Party meetings begin

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Recommendations

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• Businesses should continue to plan for restrictions on foreign nationalsentering China to largely remain in place, with only few exceptions.

• Businesses should continue to plan for logistical challenges facing localstaff who need to frequently travel. While travel restrictions within Chinahave been significantly eased, delays and complications should beanticipated in relation to the updating and management of Health Codesand continued incompatibility of some regional Health Code APP systems

• Travelers to Beijing should plan journeys and itineraries well-ahead of timein order to allow for the significantly increased security and epidemiccontrols now in place across much of the municipality

PSU (China) Consulting CO., Ltd.

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