February 19, 2020 | Investopaper
Chinese private companies are struggling to pay to their workers. The Chinese companies have cut wages, delayed paychecks as well as stopped paying their staffs completely. The outbreak of coronavirus has hit the economy of the country so badly which has left the firms unable to cover their labor costs.
To prevent people from the coronavirus which has already claimed the lives of more than 2000 people, Chinese authorities have suggested people stay back home. As a result, people are contained inside the home which has caused the business activity to go down. Shopping malls and restaurants are empty whereas theaters and amusement parks are closed. Also, people are forbidden to make non-essential traveling.
Across China, the companies are communicating with their workers that they can’t pay them or they shouldn’t pay full salaries to the quarantined employees who do not attend their work. This inability shows that the fast-growing private sector is volatile in China.
The coronavirus may hit Chinese consumption harder than the SARS outbreak 17 years ago.