Published: 01:47, July 1, 2020 | Updated: 23:25, June 5, 2023
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Pandemic recovery to require ‘new normal’
By Luo Weiteng and Sophie He

Director of Ejj Holding Ltd, Elaine Shiu (right), talks about challenges of the travel industry during the pandemic in a webinar focusing on “Getting Your Business Ready” organized by China Daily on Tuesday. (EDMOND TANG / CHINA DAILY)

As the world wrestles with the fallout from the coronavirus pandemic that may permanently reshape the global landscape, policymakers should stop playing politics and think out of the box, and entrepreneurs must adapt their business models to fit the “new normal” commercial environment, business leaders and experts told the China Daily Asia Leadership Roundtable in Hong Kong on Tuesday.

Andrew Sheng, a distinguished fellow at the Asia Global Institute at University of Hong Kong, warned in his keynote speech that “the first and foremost thing to remember is the pandemic will be longer, deeper and more painful than anything we have seen for 100 years other than world wars”.

The pandemic and the response to it have resulted in huge government deficits, massive unemployment and a decrease in global production that will lead to an increase in poverty “because the very poor are affected the worst”, Sheng said. 

And there is no model for recovery. “It leads to a rather unusual situation where there is no theory to guide us”, he said. “We don’t have (John Maynard) Keynes. We don’t have Adam Smith. This is something completely out of the textbook.”

Sheng, who served as chairman of the Securities and Futures Commission of Hong Kong from 1998 to 2005, forecast “the politics geopolitically and domestically will become pretty complicated for at least the coming two or three years due to a huge trauma and an awful lot of emotions, anger and protests that result in populism, border conflicts and national security fears”.

Sheng said local governments have supported the markets in three ways: by maintaining financial stability; helping households affected by the pandemic; and lending a helping hand to companies.

“But policymakers are only in silos. Nobody is looking at the complete whole”, he said. “Therefore, what we’ve missed out completely is the structural reform. Everybody is pointing at each other and blaming each other, with too little discussion about the course we should follow to move toward a resilient, robust, green, more equal and harmonious society in the post-pandemic era,” Sheng said.

“The real issue is governments can support, but governments cannot innovate to allow the economies to adjust. Only the business sector can do this,” Sheng stressed.

When it comes to stimulating, revitalizing and reforming the post-coronavirus economy, Sheng — who is also chief adviser to the China Banking Regulatory Commission — emphasized each country will have vastly different priorities due to their own vested interests.

“A lot of reforms in the United States, for instance, will depend very much on the November elections. In sharp contrast, what is widely reported but not quite understood is the annual government work report rolled out in April this year where Chinese policymakers created a people-based plan in their quest for financial stability and innovation through technology to help people become better, richer, healthier and happier,” Sheng said.

“We really need to rethink what doesn’t work in the old model and what proves to work in the new model. ... We need to stop playing politics and fighting each other. Those who keep on trying not to cooperate will end up being marginalized,” he observed.

The former central banker and financial regulator in Asia firmly believed “it calls for creativity in a time of crisis”.

“The fact is 90 percent of the existing policy thinking is still not out of the box”, he said. “Only those who think out of the box will be the winners”.

How to survive

To be sure, entrepreneurs in Asia’s financial center try to think out of the box.

Sunny Tan, executive vice-president of Luen Thai Holding and deputy chairman of the Federation of Hong Kong Industries, told the roundtable that his company, as an apparel and bag manufacturer and supplier primarily for US brands, such as Ralph Lauren, Coach, Tory Burch and Kate Spade, is facing big problems under the shadow of the coronavirus.

Historically, the period from April to July is Luen Thai’s production season. But this year, customers have canceled orders while the company is running tight on cash flow due to the extended credit terms.

“It’s difficult, but we still managed to navigate through the problems by working with banks and our customers,” he said.

Certainly, this is no easy task. Tan said the company has been in survival mode, cutting all non-essential expenses, trying really hard to lower overheads and unfortunately having to let go some employees.

“It’s a tough game in the industry right now because only the fittest will survive,” Tan said.

As the virus takes its toll on the travel industry, Elaine Shiu, director of Ejj Holding Ltd and COO of Luways Travel Co Ltd, said her company is making a good effort to stay afloat by focusing on local tours.

“Over the past six months or so, people are completely stuck in Hong Kong and cannot travel outside,” Shiu said. This really hurts local travel agencies like our company”.

Well before the pandemic, the young generation in Hong Kong usually wouldn’t stay in town during vacation season, Shiu said.

“We usually travel abroad and don’t really get the chance to explore the beauty of the city,” she added. 

Shiu said she believes this is really an opportunity for travel agencies to survive at the moment and also one of the new trends against the backdrop of the pandemic. 

Suthiphand Chirathivat, executive director of the ASEAN Studies Center of Chulalongkorn University in Thailand, stressed the pandemic is a big test and even big business is no safe haven.

“All kinds of businesses need to be truly resilient, innovative, creative, and see what stands as the real value with the kind of future society and the world we are moving into,” he noted.

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