Mar 25, 2020 - Economy & Business

What U.S. companies can learn from Chinese businesses that weathered the coronavirus

Photo: Xinhua News Agency / Contributor

American companies can learn from the experience of Chinese companies that stayed afloat during the months-long shutdowns as China fought the coronavirus, Boston Consulting Group’s chief economist Philipp Carlsson-Szlezak told me in an interview.

What they're saying: CEOs should lead the response themselves. "You have to really be in the moment. This is moving so fast," said Carlsson-Szlezak.

  • Company leaders have to "reframe this on a daily basis;" it can't be delegated to a task force.

Redeploy workers, don't lay them off. "You don't want to go into a mode where you lay off workers particularly since you don't know the duration," said Carlsson-Szlezak.

  • Some Chinese companies found creative ways to redeploy their temporary overcapacity — for example, one Chinese company quickly retrained staff as online influencers and were able to expand online sales.

Consider which consumer behaviors might change permanently. Some changes will be temporary, but others might stick.

  • The crisis may lead consumers to embrace different ways of interacting with companies and products.

Prepare for the rebound ... whenever it comes. "For many Chinese companies ... it was not easily predictable how soon a rebound would be underway."

  • Carlsson-Szlezak said that companies have to prepare in advance for that scenario, so that they are ready when the rebound comes and don't lag behind.

Go deeper: The coronavirus economy will devastate those who can least afford it

Go deeper

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It can be distasteful to see government bailout funds going to companies that have harmed workers, evaded taxes, degraded the environment and enriched their executives with socially useless financial engineering. But it's still necessary.

Why it matters: Vacations work in capitalist countries because employees remain on the payroll throughout and can seamlessly rejoin their employer upon their return. As millions of Americans embark on an involuntary vacation, the same principle applies.

Why TikTok and Huawei are in lawmakers' sights

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Policymakers in D.C. are targeting a handful of specific Chinese-owned companies as they try to thread the needle between protecting U.S. security and avoiding wider disruption of the two nations' interdependent economies.

The big picture: A new wave of proposals in Congress is turning TikTok, Huawei and other specific companies into proxies in Washington's broader power struggle with Beijing.

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Thanks to the coronavirus crisis, Big Tech, after battling criticism for three years, has an opportunity to show the upside of its scale and reach.

Why it matters: If companies like Facebook, Google and Amazon are able to demonstrate they can be a force for good in a trying time, many inside the companies feel, they could undo some of the techlash's ill will and maybe blunt some of the regulatory threats that loom over them.