Cities In Crisis: COVER STORY March 2020 Business Tianjin

The coronavirus has infected nearly 130,000 people, the majority of them in China. It has spread to at least 120 countries and killed almost 5,000 people. Given China’s huge importance to the global economy, the ripple effect could be very deep and long-lasting.

China’s own economy has also been a victim of the pandemic. GDP growth in the first quarter of 2020 could be about 5%, and we cannot rule out the possibility of its falling below 5% due to the coronavirus spread and the likely impact on businesses. The coronavirus could cost China's economy $60 billion this quarter, and Beijing was acting fast to avert a bigger hit.

According to the World Health Organization, up to 500,000 individuals worldwide will die during the typical influenza season each year, and a flu pandemic occurs when a new strain of the flu emerges. In comparison, if the coronavirus really does spread as widely as some experts have predicted, there are going to be millions of people dying. 

The Chinese government has, however, made significant efforts, and the number of cases has been considerably reduced. Hopefully, this will be the end of the virus episode. In terms of being prepared and improving the situation, one thing that has been done is that business owners and those in charge of workplaces have made it easier for people to stay home. 

At the individual level, prevention means preparing oneself to stay home when sick or after contact with infected people in order to help prevent transmission to others.

You can also adopt proven actions to help yourself, help others and help to stop spreading the virus, the most effective being to wash your hands more often and practice not touching your face. Yes, this seems mundane, but often the best advice is precisely that; even if the pharmacy shelves are entirely empty of N95 respirators, you can probably find boring old soap that will be more useful.

The most important thing to do is not to panic, because panic is a killer. Fear is okay. Fear is natural. We’re all afraid, with even the experts admitting that there is a huge number of things about this outbreak that we just don’t know yet. Just don’t let the fear control you.

But you’ll probably have to live with it for a while yet. Even though the problem has mostly been solved in China, we are living in a global economy, so the impact of COVID-19 could still bounce back to us if we don’t stop the effects around the world.

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Mary Smith

Managing Editor | Business Tianjin Magazine

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COVER STORY

      Cities In Crisis      

城市危机

In the science fiction classic “Foundation” by Isaac Asimov, Trantor, a planet completely dedicated to the administration of its empire, falls prey to a blockade which brings to a standstill the logistical system that keeps it fed and supplied. It’s an extreme example of what can happen if a city, or planet in this case, becomes so specialized that it is completely reliant on its logistics systems to deliver needed supplies. An actual case occurred in Paris in the 1870s when the city was under siege by the Germans. The city was cut off from France’s agricultural lands, and a city reliant on fresh vegetables and produce thus suffered greatly during the blockade. They even ate the animals in their zoo.

In the first few weeks of February 2020, as the risks of the COVID-19 virus became more apparent, Chinese cities were largely shut down. Citizens started to check the level of food stocks at home, made quick visits to their local grocery stores whose shelves started to look a bit bare, and waited nervously as they started to sense how reliant they were on distribution networks most had never thought much about. 

ECONOMIC ENGINES

Economist and urban planners have been touting the urbanization of China as one of its main economic drivers for the past 30 years and probably for the next 30 too. Vegetable plots and farmland directly adjacent to cities have been replaced as more dense and higher value buildings are constructed and outlying villages are subsumed into urban conglomerations. Urbanization brings jobs to people with a wide range of skill sets from CEOs and managers to secretaries and clerks, as well as to cooks and cleaners. Villages have a hard time supporting artists and musicians, but in big cities, if they can achieve success, they might find themselves in concert halls and art galleries and paid handsomely for their skills. The trade-off is that the agriculture that supports these urban centres becomes more specialized, located further away, and reliant on a complex logistical system.

Wuhan Yangtze River Tunnel is blocked with a barrier in Wuhan

THE BASICS

The virus and the shutdown of cities has caused the government to inventory and prioritize services. The food didn’t stop flowing to supermarkets, the hospitals didn’t close, the garbage continued to be picked up, and the buses and subways continued to run, even if on reduced schedules. The police and firemen still reported for duty as most of the rest of us sat at home and used technology to inform and entertain us. This wasn’t accidental; government officials had prioritized services so that while most of the services in the cities could be shut down to contain the virus, some things, especially food, needed to continue to flow. 

As the threat of the virus started to pass, the government was faced with the challenge of getting the economy moving again. At this stage, it became apparent just how interlinked things were. Big manufacturing facilities could restart, but soon, their smaller suppliers would need to open up as well. More workers being spread across the community means that supermarkets will be inadequate and restaurants across the city will need to start re-opening. With even more people out and about, drugstores and coffee shops need to start reopening, and eventually we can get back to normal. At this point not only government officials, but also company management have a much clearer view of their own supply chains, their choke points and their priorities.    

A sales clerk wears a mask as she waits for customers at a hat shop in Beijing

VIRTUAL CITIES

For years there have been people calling themselves digital nomads traveling the globe while still holding relatively consistent employment, often as freelance writers, photographers or computer programmers. During this most recent crisis, a larger number of us also discovered we could still do our jobs regardless of where we were. Countless meetings were held with participants at locations spread around the globe. Students dialled into virtual classrooms and communicated with classmates in different time zones. We learned that in some ways, although cities have brought us great synergy, technology sometimes makes those gains a little less important. This is unlikely to be the end of cities, but it is likely to make many individuals and companies consider how much of the status quo is, in fact, fixed.

Physics teacher Zhao Chuanliang conducts online tuition for students at a high school in Zhengzhou, Henan Province

CITIES INNOVATE

Problems often cause cities to innovate. The dangers of raw sewage helped drive the development of London’s famous sewers systems just as its crowded streets allowed for the development of its dense tube network. Singapore’s dense island location has encouraged it to build up large reserves of rice and other commodities, as well as build a fresh water reservoir right in plain sight that expanded the waterfront in the heart of its CBD. Los Angeles and Beijing both already rely on water transported in huge systems that bring water over long distances to otherwise arid locations. Chinese cities will also change as a result of pressures, maybe even directly, from this COVID-19 virus. China quickly enacted a number of people-tracking phone apps to try and reduce the further spread of the disease, although due to privacy concerns many hope they will be short-lived. I expect that food depots and warehouses will get a fresh look, and a review of food and energy delivery systems will take place at city level.

To enter an apartment complex, people must first have their health code scanned

CONCLUSION

Cities have been and will continue to be a major economic driver of China’s economy. In fact, as China’s rising wages increasingly push low-wage manufacturing to other countries, cities will only become more vital to the economy. And for cities to work, a whole host of people and services are necessary. We can draw back to a very minimum level of operations during a crisis, but once a few firms start to operate, our highly connected economy will need most people to go back to work in a short span of time. Technological developments will mean that remote work can also keep people connected to vibrant economies even if they aren’t physically in the cities, but those people will not be able to take advantage of the full spectrum of benefits that cities offer.

Companies around the world which were severely impacted by the events in China in early 2020 will hasten to diversify their supply chains and manufacturing. They may also be more welcoming of remote employees and may question their real estate costs; do they really want to maintain such a large office when workers could function for weeks without actually using it? So, while the COVID-19 virus has served to refocus our attention on the priorities, it has also created a challenge for China. Previous health crises and environmental challenges have pushed cities to improve and innovate; this one will be no exception.  

A robot with a dispenser for hand sanitizer goes around a shopping complex as the country is hit by an outbreak of the novel coronavirus, in Shanghai

在过去30年，经济学家及城市规划这一直在吹嘘中国的城市化是主要的经济驱动力之一。在2020年初，随着新冠病毒的风险逐渐增加，中国的大量城市都陷入封闭。人们开始前所未有的依赖销售网络。病毒的流行和城市的封闭导致政府开始确定所提供服务的优先顺序，在封锁城市中大部分服务业的同时，让食品生产等继续流通。随着病毒的威胁逐渐缓解，政府需要让经济重新开始运转。

在这场病毒带来的危机中，人们仍然可以通过虚拟社区来完成学业和工作。虚拟城市为我们带来了巨大的协同效应，技术的发展使得远程工作也可以让人们与充满活力的经济保持联系。健康危机和环境挑战往往还会促使城市进行创新。中国的城市也将发生许多直接的变化。世界各地的公司也将加快供应链和制造的多元化。

Author: Michael Hart is the Managing Director of Griffin Business Management www.griffinbiz.com a real estate related consulting firm with offices in Tianjin.

CONTENTS MARCH / 2020

05   BIZ BRIEFS

09   NUMBERS

10   ECONOMY: Reducing The Effects of The Coronavirus Outbreak

12   FEATURE STORY: These Chinese Cities Are Bucking Trends In Global Real Estate Market

15   COVER STORY: Cities in Crisis

20   INSPIRATIONAL: Leonardo Del Vecchio

23   TRAVEL: Guatemala

26   INVESTMENT: Cambricon Technologies

28   ENTREPRENEURSHIP: Your Personal Brand Is As Important As Your Business Brand

30   IN DEPTH: Eradicating Poverty by 2020

32   LEGAL ASSISTANCE : Extraordinary Tax Policies for Novel Coronavirus Pneumonia Epidemic

34   TECH: Social Media Bots Technology replacing customer care

36   E-BIZ: e-Government

38   FOCUS: Robots of the future

40   MARKETING: The Buying Trends of Customers in 2020 

42   HR: Challenges and Trends of Employer Brand

44   BUSINESS NEWS

47   CHAMBER REPORT 

50    LISTING 

56    ART & LEISURE: Cuju

58    BOOK REVIEW

59    LAST WORDS: Don’t let the fear control you

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