Coronavirus erases potential income streams and business revenues. Thus, the acute economic pain is gripping many people in China. In China, there was a survey made. The study found out that seventy-five percent of Chinese small businesses are expecting to fail if they won’t have revenue for two months.
For now, many can hang on with no income or revenue by relying on savings. If the virus outbreak is not brought under control and economic conditions return to near normal, their problems will become unmanageable in a few months.
There is an extended lack of income among workers, especially those who are with families. One expert warned that it risks a significant increase in urban poverty.
Peking and the Tsinghua universities in Beijing have some very high-quality Professors. These two universities are China’s top institutions of higher learning. The professors surveyed 995 small and medium-sized enterprises. They found out that 67.1 percent of those enterprises with their financial services can only sustain operations for two months if they had no revenue at all. Thirty percent of them said that their taxes this year were expected to shrink by at least half from 2019.
The economic storm clouds gathering is pronounced for migrant workers. They have left their rural homes to start their small businesses or take odd jobs. Many of them are expressing deep anxiety about the lost revenues and incomes during the Lunar New Year holiday amidst the looming pressure to make payments for food, rent, and other expenses.
Situation in China
China’s Twitter is Weibo. There a woman who lives in Shenzhen said that her anxiety about her financial future was more significant than worrying about fighting the virus. Like many other people, her husband, a taxi driver, is staying home to avoid contracting the virus. Thus, he was no more able to earn enough money to cover the expense of renting a taxi or alone make enough to support the family. The rent for their home and the fee for her son’s kindergarten tuition were still due; moreover, that food prices had grown more expensive due to supply shortages.
She wrote that living like that is too difficult. Her husband is going out to work every day and worries about getting infected with the virus. Nevertheless, he must go out because of the pressures of life. They didn’t return to their hometown for the Lunar New Year holiday this year to stay and make more money. Now they have to take more money from their savings for paying the taxi rental fee.
A small-business owner, during the Sars (severe acute respiratory syndrome) outbreak of 2002-2003, lost all his money. Nevertheless, he worked very hard for more than a decade to save. Finally, he was able to open a furniture factory in 2018. His business was beginning to run smoothly before the Coronavirus outbreak.
One pregnant woman with her second child said that her husband was a salesman. He had to support five people, including her parents. Nevertheless, the virus forced him to stay at home.
You can feel what economical impact had the virus on the Chinese Economy.