Chinese Businesses Are Going Bankrupt

Coronavirus is destroying the business landscape across Asia

As the coronavirus continues to stretch on here in China, its effects are having a far-reaching impact on many living across the country. But despite what you might think, those infected are not the only ones feeling the impact of the virus.

As I feared they would, many companies are declaring bankruptcy under the pressure of trying to stay afloat without customers, and many more are on the way. So far, the two biggest names to go under are IT giant Xiongdilian, and KTV entertainment company King of Karaoke.

I honestly never thought I would see the day that a karaoke company would go bankrupt in China; karaoke being the favorite hobby of literally everyone I’ve ever met since moving here.

But how can companies such as King of Karaoke stay afloat? Rent still needs to be paid, and customers are no-where to be seen.

Initially, spending time in crowded areas was discouraged by the government. Only a few weeks ago, the government was giving warnings, and people were choosing whether or not to take heed.

However, in a relatively short time, the attitude of the government and local law enforcement has completely changed.

Ghost City

The last of the bars and restaurants that were still running have now closed their doors until further notice. Stores and shopping centers have almost all closed across the entire city, with exceptions given to stores that need to run because they sell essentials. This includes grocery stores and pharmacies.

I had initially speculated in an earlier update that restaurants that operate as ghost kitchens would survive the virus period. However, I’m noticing that one by one, some of my favorites are dropping off of my delivery app. I’ve speculated that while absolutely everyone in the city is now dining at home, most people are cooking their own food.

There’s been a lot of local distrust of the people who are working in the kitchens, and fear that food cooked by other people may be contaminated. So people are having ingredients delivered that they’re boiling to temperatures that would kill any virus of bacteria present on the food.

The precautions being taken are at pandemic-level, so I’m very worried to see how things may escalate from here.

My Situation

My apartment building had been slowly ramping up safety measures over the last couple weeks of January and seemed to peak with a letter telling us to stay home and not invite visitors.

However, as of a couple of days ago, all the entrances were barred except one, and on that one, they stationed a guard. This guard ensures everyone coming into the complex lives in the building. They’re also doing laser-gun temperature checks on everyone who lives in the building and has been outside for more than a few minutes. I’m allowed to go outside the gate and pick up a food delivery, but if I go around the block, I have to be checked before re-entering.

Travellers be warned

Make no mistake; the situation is getting more dangerous here in China and across Asia. If you have plans to travel to the continent over the next month, you may want to re-think them.

I’m not saying that to spread fear; I have no interest in causing panic. I’m saying it because I’ve been to hospital, and I’ve seen the enormous amounts of infected people. I’ve seen how seriously the doctors and nurses are taking it. People who know the truth (such as doctors) are anxious, and there’s probably a lot more going on that the general public doesn’t know about.

I haven’t left my apartment (except for essential hospital visits) in weeks, and now that I no longer need the hospital, it could be a long time before I leave again. If your business in Asia can be achieved at a distance, it’s not racist to cancel your trip and stay somewhere safe until the infection rate dies down.

A lot more companies will go under before this pandemic is over, likely fundamentally changing the business landscape all across Asia. Stay informed right here by following Money Clip, and stay safe and prepared wherever you are in the world.