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80.8% of Chinese enterprises have resumed work

Recently China Garment Association (CGA) surveyed to see if clothing enterprises (brands and manufacturers) have restarted their operations in China amidst the colossal spread of Coronavirus – COVID-19.

80.8-percent-Chinese-enterprises-resumed-work
Figure: Survey shows a positive trend as 80.8% of the enterprises have resumed work. Courtesy: Sourcing Journal

325 companies in 14 industrial clusters in China were asked in this survey on 27-29 February and 77.1% of the companies responded to the CGA. 69.7% of 325 enterprises were manufacturing firms, while 30.3% were brands.

It shows a positive trend as 80.8% of the enterprises have resumed work. 19.2% of enterprises have not resumed work to avoid the risk of the epidemic.

Some of them stated the government restrictions are still there, while some are waiting for resumption approval. It is believed that most of these companies will resume work till mid-March.

Hubei Province is a huge hub for apparel manufacturing; however, it has no clear plans to resume manufacturing in the coming days due to the massive spread of the virus within Province.

The resumption of operation is still facing challenges due to difficulties such as shortage of workers; asynchronous resumption of work between procurement process, production process and post-production process within enterprises in the industrial supply chain; poor transportation and logistics; reduced orders in the market downturn; and lack of protective material as well as resources.

The survey further found that the resumption operation of large-scale enterprises is way better than that of small and mid-sized enterprises. CGA conducted the same survey in the 3rd week of February and the gap of resumption of large enterprises and SMEs has narrowed significantly in the recent survey.

It is found that around 94% of large-scale enterprises have resumed work out of 77.1% of those who responded to the questionnaire. This is an increase of 6.8 percentage points from the previous survey and higher than that of SMEs by 16.1% and 25.1 percentage points.

The clothing enterprises in the South-East coastal provinces have seen a great turnaround due to faster and effective control over the epidemic. The workers, with the support and supervision of the Chinese Government, are returning to work from other provinces through chartered flights and chartered cars.

These workers are also being provided with bonuses and subsidies to actively resume production. 58% of large enterprises saw the return of more than 70% of their workers, while the same number was 41.5% when it comes to SMEs.

If the survey conducted by CGA is anything to go by, the situation seems to be improving in Chinese apparel factories and apparel brands’ stores/offices.

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