How the Chinese have to spend the night in the office en masse

According to official figures, about 20,000 bankers and stock traders remain on the store floor in Shanghai. They are no exception in China, where the “closed-loop system” is becoming increasingly popular. For many companies, this is the only way to escape the restrictions of the spread of the Corona virus.

It was just 9:30 p.m. on Sunday when bank employee Liu, 37, got a call from her boss. A shutdown had just been announced in Shanghai, and the bank was in danger of running out of staff. Liu rushed to the office the same night, and he’s been living there for seven days. She sleeps in an armchair in a conference room, and eats in the cafeteria. “In tough times, eating and sleeping less, that’s okay,” she says. “The only problem is we can’t take a shower.”

Like Liu, many workers in Shanghai work in an office or factory, in an effort to keep the most important city going for the Chinese economy. Lujiazui Financial District – the Wall Street of China – is home to about 20,000 bankers and exchange dealers, according to official figures. And thousands of workers are also unable to go home in the Shanghai port, as are the factories of Pegatron (Apple supplier) and SMIC (computer chips).

sleeping bags

A “closed-loop system”, where employees stay in their company’s bubble, is on the rise in large parts of China. For many businesses, this is the only way to operate amid lockdowns and restrictions. Bosch Unipoint, the auto parts maker, ensures its plants have enough stock to hold workers for four weeks. Others report buying sleeping bags and toiletries, and preparing sleeping quarters.

China is battling the biggest outbreak of Covid since the start of the Wuhan pandemic in 2020. Many cities have implemented lockdowns and travel restrictions, but are struggling to control the omikron variant. On Sunday, China recorded 13,287 local infections, the highest number since February 2020, of which 8,226 were in Shanghai. In Jilin Province (4,455 infections), authorities have also been unable to contain the virus for weeks.

Even more worrying is the situation in Shanghai, the commercial heart of China, where local authorities have always vowed not to go into lockdown. Overwhelmed by Omicron, they announced a “gradual shutdown” on March 24, with Shanghai shutting down in two steps, every four days. In practice, these lockdowns have been extended in many areas of the city, so that Shanghai is now almost completely closed.

Furthermore, a city that will never be locked down is not well prepared now that this has happened. Many residents complain about the lack of food and the lack of medical care, which has already led to deaths. Residents also question the official figures, and The Wall Street Journal Detection of an outbreak of Covid-19 disease in a nursing home. However, the Chinese authorities appear to be committed to the policy of not spreading the virus, mainly due to the low vaccination coverage among the elderly.

According to experts, Shanghai will need until the end of April or the beginning of May to beat the current outbreak. This is a blow to the capital, which serves not only as the financial center of China, but also as an important port and industrial zone. The city accounted for 3.8 percent of China’s GDP last year. Several investment banks have already said they do not consider China’s 5.5 per cent growth target – already low by Chinese standards – feasible this year.

Winter Olympics

To limit the economic damage, many companies are trying to continue their operations in a closed loop system. In doing so, they are somewhat copying the Winter Olympics model: just as athletes can participate in competitions there in a closed bubble, so employees can continue to work in a corporate bubble. Staff are also tested daily.

Many employees express understanding of the situation, especially if they receive an allowance. But complaints can also be read on social media. Some workers are threatened with dismissal if they want to go home, and others are placed in appalling conditions. An employee of a car company, keeping diaries online, describes how his colleagues were not given blankets at first, and how unhealthy meals increasingly caused illness. The hardest part: It was initially supposed to stay for ten days, but that was extended to 25 days.

Leo, a bank employee, loves to help her company out of trouble, but struggles with uncertainty. Normally we were allowed to go home today, and yesterday I started. But we heard last night that the lockdown will last longer. I try not to have any expectations anymore, to give in to my fate. I’m mentally prepared to stay here for a few more days. I try not to think that it could take much longer.

no solution

According to economists, the closed-loop system can provide comfort for companies, but it is not a structural solution for the Chinese economy. Companies can continue to produce, but it is difficult to get their products to their customers. Shanghai’s port is open, but trucks hardly get in or out due to strict restrictions. Action bubbles are also not possible in restaurants and shops. Shanghai promised 20 billion euros in aid measures.

The continuation of the policy of not spreading the virus, which threatens to lead to more and more shutdowns with omikron, is worrying many business leaders in China. “While the majority of G20 countries are moving away from lockdowns, China is sticking to its old toolkit of zero tolerance and tough measures,” said Jörg Woetke, president of the European Chamber of Commerce in China. “We fear that we will see the beginning of the Omicron crisis in China.”