On the Beat | By Wong Chun Wai

Busting post-MCO blues

THE movement control order (MCO)will eventually be lifted, so Malaysia must resume rebooting its economy, while simultaneously calculating losses.

It’s certainly not going to be easy drawing up a post-MCO business strategy, especially since many of our customers and partners have either sunk or are struggling to stay afloat in an unprecedented environment.

There are no business models to fall back on. So, it’s time to fly by the seat of our pants as the world thwarts an unseen enemy against the backdrop of a vaccine remaining a mere vision. Malaysia will recalibrate its economic model, where we must continue with our lives knowing the virus lurks out there freewheelingly.

Ultimately, businesses must resume. While much has been written, sentimentally, about how we have taken the planet and our lives for granted, Covid-19 has also given employers a chance to have a real hard look at their staff, and for the government to test the mettle of their ministers and civil servants.

It’s all hands on deck now. For business organisations, the MCO has provided the opportunity to reveal their staff’s tenacity, determination and resolution to ride through the crisis together as a team.

Unfortunately, drawing up a post-MCO strategy is not for the fainthearted. Instead of pitching in, some of the workforce has resigned to negativity with their employers’ plans for a way out.

This is the time to separate the wheat from the chaff – selfish ones refusing to make sacrifices, and those going the extra mile to ensure their company’s sustainability.

As we pore over our reboot plans, China is obviously a model we should consider because they have much to share with us. Our country is certainly not out of the woods with businesses only feeling their way out.

China’s industrial production reopened smoothly, and even life in Wuhan – the original epicentre of the pandemic – has resumed, though with numerous restrictions still in place. For example, no one can even take a train ride without the “green approval” on their mobile phone. Checks are stringent and the offence is serious.

BMW China resumed operations with its offices opening from Feb 3 and its plant operating since Feb 17. In fact, Xinhua reported that about 85% of its dealers are open.

The report also said that since Feb 10, French cosmetics giant L’Oreal, gradually reopened its operation sites in China, while adhering to strict precautions. It said around 80% of retail locations has reopened, and that traffic has been progressively returning since last month.

Hermes created world headlines recently when the French brand’s Guangzhou store opened and bagged US$2.7mil (RM11.8mil) on its first day, the highest daily haul for a single boutique in China.

So, the purchasing power of many rich Chinese remains intact, and given the number of them out there, it’s a stark reminder to the world of their economic clout, too.

Chinese restaurant chain Haidilao welcomed customers once again after being shut in late January. However, customers reacted angrily when they found that prices had jumped by nearly 6%, sparking outrage in Chinese social media platform, Weibao.

The South China Morning Post reported that Haidilao had to issue an apology and restored prices to pre-closure rates. It ended up offering discounts of up to 33% on takeaway orders.

Likewise Xibei, another Chinese restaurant chain, went down the same path initially, only to put its plan into reverse later. It too had to issue an apology.

Yes, not everything is rosy, particularly in a key sector like automotive, where plants have only slowly been re-opening since March. Production rate is still low due to poor orders and supply chain issues, according to a Roland Berger study.

Automotive sales plunged by 82% in February 2020 compared to Feb 2019. Travel restrictions have been lifted, but for Chinese airlines, there are still no signs of recovery, what with a pessimistic forecast for Q2 2020. On the manufacturing front, 96.6% of large and medium enterprises resumed work from March.

But it’s a good re-start by China, which can best be described as a silver lining because it’s the largest market for many countries, including Malaysia.

Last year, Malaysia and China’s bilateral trade hit another record high, rising to US$124bil (around RM503bil) for the full year 2019, said China’s Ambassador to Malaysia, Bai Tian, in a report.

Citing Chinese customer statistics, Bai said this is a 14.2% increase in bilateral trade from 2018’s figure of US$108.66bil (RM443bil). China remains Malaysia’s largest trading partner, followed by Singapore and the United States.

“Part of the huge bilateral trade is linked to the investments coming in, because when Chinese investors come to Malaysia to set up factories, they buy equipment from China. Once production increases, a portion of those products are then sold back to China in large percentages.”

For tourism, China has been Malaysia’s third biggest tourist source after Singapore and Indonesia since 2012, displacing Thailand from the top three.

According to the latest statistics, Malaysia has consistently welcomed over two million Chinese tourists a year since 2016. That figure hit a record high of 2.94 million people in 2018. While travel will be down in the doldrums for a while, what needs focus is how well our Tourism, Arts and Culture Ministry and the related stakeholders have prepared for once the boom gate is lifted.

Yes, Visit Malaysia 2020 is dead and buried. There will be near-nil international travel for a while.

But the hunger for travel, after months of being locked in, has never been greater, and with airlines struggling to stay afloat, it’s a good time to plan for that eventuality. China could well provide our first arrivals. So, we’ll have no shortage of competitors in Asean who would want to be first to benefit from the initial wave of Chinese tourists.

According to Travel Weekly Asia in an April 2020 report, Thai tourism has already started laying the groundwork.

In a China Thailand Travel Sentiment Survey 2020 conducted in mid-April, based on 1,000 travellers, it found that 71% of respondents indicated a preference to visit Thailand. It found that August, October and December were the most popular months for trips in the remaining half of the year, with Chinese tourists expected to be younger and more independent.

No doubt, the road to recovery will be rough and twisting. Consulting firm, Boston Consulting Group (BCG) encapsulated that prognosis perfectly by saying governments must develop a resilient and adaptive strategy for re-opening, allowing for adjustments as events unfold and new information emerging.

The weeks of lockdown isn’t a holiday at home, but a time for political and corporate leaders to reflect and think of how to remain in shape, eager to be at the starting blocks and be the first to take off.

So, cut the whining and fight to survive.