COVID-19 Briefing: Lessons from China

As communities across the United States gradually relax social distancing restrictions, many are anxiously wondering what will come next. Fortunately for us, we can learn from the experience of other communities around the world that are ahead of us on the pandemic curve. In this discussion, several Board of Trade members describe how their companies’ operations in China have evolved.

Moderator: James Robinson, Global Lead, Geo-Commerce, APCO Worldwide

Al Hankins, Manager of Procurement and Contracts, Bechtel
James Shepherd, Head of Research, Greater China, Cushman & Wakefield
Jeff Astle, Managing Director, APCO Shanghai

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Early Days

When the pandemic struck, the Chinese government acted quickly and exercised their strong authority to close facilities, taking a lot of decision-making out of the hands of businesses. Jeff Astle, Managing Director of APCO Shanghai noted that staff in his office were much more adaptable to working remotely than he had expected. The biggest setbacks came with not being able to build relationships with clients face-to-face.

Al Hankins, Manager of Procurement and Contracts at Bechtel, explained that his company’s first priority in the early days of the pandemic in China was to ensure their workers were protected with appropriate sanitation gear and policies. He says that Bechtel also stayed resilient by immediately establishing a COVID-19 crisis group that provided clear and consistent communications to all workers. They were also willing to “right-size” their operations—Al noted that their debt-free, privately-held status enables them to be nimble.

Current Conditions

Life and business in China are beginning to resemble normal times again, according to our panelists. James Shepherd, Head of Research in Greater China at Cushman & Wakefield, said that the shutdown in China did not last long and that the worst of the crisis passed quickly. Once shutdown orders were lifted, his office started by bringing back only the workers who need to be physically present to do their job. As the threat reduced, more staff began returning to the office on a voluntary basis. His office also ramped up cleaning, provided hand sanitizer, upgraded HVAC systems, began checking workers’ temperatures, and implemented new requirements for wearing masks and limiting the number of people in a meeting. Overall, he said that the shutdown and reopening process was incredibly smooth. “Blink and you would miss it,” said James.

Some changes will stick around. Jeff Astle shared his expectation that the technologies that were quickly adapted to enable fully remote work will stay because they have made work more productive and dynamic. Al Hankins said that Bechtel is now embracing remote work, whereas before the pandemic the culture of the company led most employees to work from the office.

Market Changes

James Shepherd noted that retailers and businesses with a strong online presence did fine during the shutdown but companies without a strong online presence took a hard hit. Many developers in China have moved toward the residential real estate market, which is considered a safe haven, and away from the commercial real estate market. Though James does not expect many companies to go fully remote indefinitely, he noted that they do tend to have the upper hand with developers in this moment.

Overall, for commercial real estate, James expects that two trends will cancel each other out: some companies are moving more of their staff to remote work, and others are expanding their office space to give each employee in the office more space and allow for social distancing.

Looking across the Chinese economy, Jeff Astle noted that some sectors are doing better than they were before the pandemic, and some are taking a hit. Overall, he estimates that the economy is at about 70-90% of normal capacity. James Shepherd agreed but said he expected the economy to rebound very quickly.

Lessons Learned: Be flexible, but speak clearly and consistently.

As a global company, Bechtel faced many different rules and regulations across markets. Al explained that their approach was to be flexible and to accommodate those differences so that they could maintain relationships with stakeholders wherever they were. Managing staff travel was especially difficult when each country began limiting immigration or closing borders. Al explained that their first move was to differentiate between essential and nonessential travel, even being creative and finding new ways to conduct inspections over video. Overall, Al is optimistic because Bechtel was able to honor service agreements and move forward with the projects it had planned because it had stayed flexible and adaptable.

Pointing to Al’s account of Bechtel’s early pandemic response, James agreed that clear and consistent communication with employees is critical during big operational changes. He acknowledged that culturally there are differences between the United States and China that work to China’s advantage, such as a general willingness to wear masks. But whatever your company policies are, clearly asserting them will slow the spread of the virus and will be reassuring to employees concerned for their safety.