While in Europe the corona virus has just passed its peak, China is slowly returning to normality. Günther Tengel (Managing Partner & Chairman Amrop CEE) spoke with Jimmy Chen, CEO & Managing Partner Amrop China, to find out how China has dealt with the crisis and what impact the virus is still having on the Chinese economy.
Learning #1: There is optimism, but caution is still required
Although economic and social life in the Chinese city of Shanghai is slowly getting back on track, caution is still required. “Everyone here is aware of the danger of a second wave of infection,” explains Jimmy Chen, who shared his experiences in dealing with the coronavirus with us in a video call. And it must also be kept in mind that as long as the US, UK and many other countries are still primarily occupied with fighting the virus and facing rising case numbers, China is still a long way from restoring economic balance. “Against this background, I don’t want to be overly optimistic, because I know that a large part of Chinese production is destined for the other part of the world, and until these parts have stabilized, restoring the balance will take some time,” says Chen.
Learning #2: Looking back & current situation
The beginning of the Covid-19 breakout in China was accompanied by constant observation of the curves. In addition, Jimmy Chen relied on his own assessments: “Of course we also looked at the facts and figures published by the government, but we also knew that the lockdown of Wuhan meant that something really serious was happening, something unprecedented. The initial curves showed only a small number of cases, but we saw that the curve was rising exponentially. So my common sense told me that we have to do something. This was also why we closed our office even a little before the government recommendations reached us. My immediate reaction was to take care of the people on our team and their families.” He considers forward-looking action and the tendency to overdo certain measures essential in dealing with such crisis situations. “We have helped each other through our tightened protective measures, the immediate use of masks etc., because people suddenly felt more confident again and were much more reassured. We built up a cocoon of protection, so to speak,” explains Chen. Of course, China was also able to draw on its experience in dealing with SARS, the CEO adds. “I think that our sense of crisis is a bit stronger than in many other countries. And the past has shown that actions are by far more successful than reactions.”
Learning #3: Economy: Who wins & who is disrupted the most
In China, too, the corona crisis is hitting the aviation industry, gastronomy and the hotel industry particularly hard. Jimmy Chen knows from his own acquaintances in the hotel industry that they are facing unprecedented losses. “Other industries that are suffering heavily from the crisis are banks, the automotive industry, the fashion industry and industries selling luxury goods. Here, entrepreneurs are expecting massive disruptions. In these industries we will probably even see a 70 to 80 percent drop in short-term revenues. This also applies, of course, to export-oriented industries. On the other hand, medical care, general health care, but also media and companies involved in the development of e-learning and e-commerce tools are flourishing. And as we’ve seen in the last couple of weeks, people are increasingly stocking up on food and drink,” says Chen. The CEO is skeptical about whether Corona could entail cost-cutting and efficiency programs in the longer term. Although there have been redundancies, especially in the industries already mentioned, it should not be forgotten that mass unemployment would quickly become a huge socio-economic problem. Chen also warns against putting all countries under the same umbrella.
Learning #4: Trying to imagine what the new normal might look like
Jimmy Chen hesitates to make short-term predictions about the future, but he is convinced that our future will be different and that we will gradually move towards a new normality. “We should therefore try to imagine what this new normality might look like. And see it case by case, business by business and country by country. I don’t believe that globalization will progress in the same way. And I think that every country must learn to look back and project what it has learned into the future. I also believe that there will be much more online activities and that machine learning and new forms of retail will play a greater role.”
Learning #5: Focusing on the team and good leadership enhances the team spirit
Furthermore, the changed work situation has given decision-makers and supervisors a clearer picture of who excels and who performs less well. “Even though you’re not sitting together in an office, you get a good feeling about it because you can still see who is a little more involved and raises his/her hand more often,” says Chen. As a manager, during such crisis situations, you should concentrate above all on controlling all controllable aspects and act confidently in order to provide support for the employees. This can even create a stronger sense of togetherness in the team, as Jimmy Chen has experienced with his employees. “The team spirit is fully there,” he explains with a laugh.