[ad_1]
\n<\/p>\n
BEIJING —
\nReal estate agent Du Xuekun\u2019s sales usually jump after the Lunar New Year holiday. But this year, Du has been at home for a month with no income after vast swathes of China\u2019s economy were shut down in a sweeping effort to contain a virus outbreak. <\/p>\n
\nDu, who lives in Jiaozhuo, near the central city of Zhengzhou, is one of millions of people who are bearing the soaring cost of the most extreme anti-disease measures ever imposed. Some businesses are reopening, but Beijing has told the public to stay home if possible. <\/p>\n
\n\u201cPeople will buy food and clothes online but for sure won\u2019t buy an apartment without seeing it,\u201d said Du. <\/p>\n
\nIndustries from auto sales to travel to retailing effectively shut down after curbs were imposed starting Jan. 23 with the suspension of most access to Wuhan, an industrial metropolis of 11 million people at the center of the outbreak. <\/p>\n
\nTravel restrictions expanded to cities with more than 60 million people, while curbs on business spread nationwide. The Lunar New Year holiday was extended to keep factories and offices closed. Nationwide, thousands of restaurants and cinemas have been shut to prevent crowds from gathering. <\/p>\n
\nThe rising losses threaten to become a political liability for the ruling Communist Party. Local officials have been ordered to revive business activity but are moving cautiously. <\/p>\n
\nBy Sunday, some 1,665 deaths and 68,500 cases had been reported in the two months since the first infections in December.<\/p>\n
\nEconomists warn optimism that the disease might be under control is premature. Even if auto manufacturing and other business resumes as planned, activity won\u2019t be back to normal until at least mid-March. <\/p>\n
\nLosses are expected to be so large that forecasters have cut estimates for China\u2019s economic growth.<\/p>\n
\nForecasters including Capital Economics say growth, already at multi-decade lows, might fall to 2% in the three months ending in March, down from the previous quarter\u2019s official figure of 6%. <\/p>\n
\n\u201cIf the economy really gets into a tailspin, the challenge for the party will be substantially increased,\u201d said Steve Tsang, director of the China Institute at London\u2019s School of Oriental and African Studies. <\/p>\n
\nLocking down Wuhan might have hurt more than it helped by causing panic and was \u201cvery damaging to the economy,\u201d said Tsang. <\/p>\n
\n\u201cThey will have to rethink the lockdown approach,\u201d he said. <\/p>\n
\nThe ruling party has responded to the mounting economic pressure by promising tax breaks and subsidies to companies hurt by the anti-disease measures. <\/p>\n
\nThe government needs to \u201cmaintain stable economic operation and social harmony,” President Xi Jinping said Wednesday.<\/p>\n
\nOn Friday, the Ministry of Finance announced that companies with monthly sales below 100,000 yuan ($14,000) will be exempt from value-added and other taxes. It said companies that cannot repay loans might be allowed to invoke \u201cforce majeure,\u201d a last-resort legal measure that can waive obligations in disasters. <\/p>\n
\nTravel and hospitality were hardest-hit after the government canceled group tours and told businesspeople to put off travel. Airlines canceled thousands of flights and hotels closed. <\/p>\n
\nThe manager of a travel agency in Shenyang, the biggest city in China\u2019s northeast, said its monthly revenue, usually 100,000 yuan ($14,000), fell to zero. He said the agency still is paying rent and wages of 20,000 yuan ($2,800) a month. <\/p>\n
\n\u201cWe don\u2019t expect to see a recovery until May or June,\u201d said the manager, who would give only his surname, Xu. \u201cWe do hope the government can give us a tax exemption or reduction, but we still have seen no subsidies.\u201d <\/p>\n
\nProperty sales have fallen to almost zero over the past three weeks. The industry employs millions of people and drives demand for appliances, furniture and other consumer goods. <\/p>\n
\nDu, the real estate salesman, said he usually closes two sales a month and earns 7,000-8,000 yuan ($1,000-$1,100). He needs to make a 3,000-yuan ($430) monthly loan payment whether he works or not. <\/p>\n
\n\u201cI have no base salary and live on commission,\u201d said Du, 27. \u201cWithout sales, there will be no income.\u201d <\/p>\n
\nChinese leaders already were struggling to shore up economic growth that slowed to 6.1% last year thanks to weak consumer demand and a tariff war with Washington. Some economists, citing industry surveys and other data, say real growth already was much weaker than that. <\/p>\n
\nThe anti-disease measures closed factories that supply the world with smartphones, furniture, shoes, toys and household appliances. That sent shockwaves through other developing countries that supply industrial components and iron ore, copper and other commodities. <\/p>\n
\nSouth Korea and other economies that rely on China as an export market face potential job losses. <\/p>\n
\nE-commerce companies are hiring extra workers to cope with a flood of demand as families stay home and buy groceries online. But streets in Beijing and other major cities are still empty and eerily quiet. <\/p>\n
\nAuto sales plunged 20.2% in January from a year earlier, deepening a 2-year-old decline in the industry\u2019s biggest global market. Sales fell 9.6% last year to 21.4 million, well below their 2017 peak of 24.7 million. <\/p>\n
\nThat is squeezing global automakers that look to China to drive revenue as they spend billions of dollars to develop electric vehicles to meet government sales targets. <\/p>\n
\n\u201cEnterprises are under huge pressure,\u201d said a statement by an industry group, the China Association of Automobile Manufacturers. <\/p>\n
\nChina rebounded relatively quickly from its 2002-03 outbreak of SARS, or severe acute respiratory syndrome, but economic conditions now are less rosy. <\/p>\n
\nSARS struck when China was entering a history-making boom powered by construction and exports. Growth peaked at a blistering 14.2% in 2007. By contrast, the latest virus hit in the midst of a slowdown. <\/p>\n
\nIn smartphones, Apple, Huawei and other brands face a potential hit because China is both their No. 1 market and global production base. <\/p>\n
\nShipments might fall as much as 50% this quarter compared with the final three months of 2019, according to research firm Canalys. <\/p>\n
\nThere is a \u201chigh risk\u201d that component suppliers, with factory workers still stranded in their hometowns by travel bans, \u201cwill not be able to ramp up to normal capacity if the outbreak is prolonged,\u201d Canalys said in a report. <\/p>\n
\nApple and other global vendors face a \u201cserious impact\u201d if the virus spreads and those suppliers close, the report said. <\/p>\n
\n\u201cThe current situation will likely lead to some of the worst ever shipment numbers,\u201d it said. <\/p>\n<\/div>\n