Areas including Jiangxi province in the south
have extended weekends to 2 1/2 days and cut
admission prices for local scenic spots.
The ruling party has told companies to keep
paying wages and avoid layoffs. Private
companies were promised tax breaks, low-cost
loans and other help, though state media say
bureaucracy is slowing the flow of aid.
It isn’t clear how many companies might close
for good under the pressure of paying rent and
wages with no revenue.
“Companies can’t resume full production due to
cuts in orders at home and abroad, leaving them
unwilling to recruit workers,” said economist Zuo
Xiaolei at Galaxy Securities in Beijing. “If workers
have no income, then consumption will decline.”
Consumers need to be reassured their health
and jobs are protected, economists say.
A strategy that worked after the 2008 crisis
was Germany’s “short-time work,” said Kuijs of
Oxford Economics. Employees worked fewer
hours but companies received government
subsidies to pay them full-time wages. That
kept experienced workers in place and
supported consumer spending.
“That was considered to be quite a successful
system,” Kuijs said.
Chinese exporters of consumer electronics,
clothes and other goods are unlikely to get
much help from abroad as the United States
and Europe suffer waves of job losses and tell
consumers to stay at home.
“Exports could easily fall by 10% or more in
2020,” said Larry Hu of Macquarie Capital in
a report.