Restarting virus-hit Chinese economy not easy

Li Meng opened his third restaurant in Beijing at the end of 2019, spending all his earnings from the first two restaurants to expand his business.

When the new restaurant started to make a profit in January, the coronavirus outbreak shut down most of the businesses in the city, including his Little Yunnan Restaurant.

"It was like a dream," Li said, "all of sudden everything stops, like someone pushed the pause button."

He said the shutdown of his three restaurants for two months has lost more than 2 million yuan (280,000 US dollars) of business.

He reopened on March 25 but is losing money everyday due to lack of customers.

"It takes time for the business and people to slowly recover with the general atmosphere," he said. "It will be a very difficult time for us."

China, where the coronavirus pandemic emerged in December, is cautiously trying to get back to business, but it's not easy when many millions of workers are wary of spending much or going out.

"When incomes are going down and wealth are shrinking, people will be more prudent in their spending. This will have long lasting impact on the recovery," said Zhu Zhenxin, chief economist of Rushi Finance Institute in Beijing.

In China, e-commerce got a boost when families stuck at home bought groceries and other items online. But forecasters expect little to no growth in this year's total spending on clothing, food and other consumer goods.

"I will be definitely more thrifty. I will not spend on anything unnecessary," said Zhang Lizhou, 26-year-old marketing manager whose company has not resumed to business yet.

Economists earlier forecast China would bounce back as early as this month. They cut growth forecasts and pushed back recovery timelines after January-February activity was even worse than expected.

At the same time, public anxiety has been fed by reports of new outbreaks that have led to more controls.

It isn't clear how many companies might close for good under the pressure of paying rent and wages with no revenue.

In 2003, China experienced a brief economy standstill due to the outbreak of SARS but recovered quickly with even faster growth.

Now it is more difficult with the COVID-19, economists have said.

"In 2003 the economy was in a rising channel so the recovery was very quick after a short period of fluctuation," said Zhu Zhenxin, "now even without the epidemic, the economy was under downward pressure. The epidemic has amplified the problems, so the recovery pace will be much slower than 2003."

For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks.

But the virus is highly contagious and can be spread by those with mild or no visible symptoms.

For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, and could lead to death.