China’s entrepreneurs get back to business

Sophia Yan
·4-min read
Plastered 8 store 
Plastered 8 store

British entrepreneur Dominic Johnson-Hill, founder of a clothing brand in China, is finally seeing some profits trickle in 10 months into a difficult year given the pandemic. 

Lockdowns were enforced in Wuhan, ground zero of the coronavirus, in late January – just days after his third store in China opened ahead of a major public holiday that normally would have meant lots of customers and big sales.

But with quarantines nationwide, he was forced to shutter stores for his Plastered 8 street clothing brand.

“February was horrendous – March was even worse,” says 48-year-old Johnson-Hill, originally from Guildford. “February was one of the most worrying times of my business career.”

By late spring, quarantine restrictions began to relax, allowing him to re-open the shops after months of closure. But a surprise second wave that hit Beijing in June meant yet another setback. “It was like being kicked in the nuts after you’ve just been kicked in the nuts – it was awful,” he says. 

Dominic Johnson-Hill
Dominic Johnson-Hill

A resurgence of activity across China in recent weeks as infections have subsided means that business is resuming a more normal pace for Plastered 8.

Traffic is back in full force in Chinese cities, as evidenced by a swell in noise pollution and surge pricing on ride-hailing apps again common during peak times.

A major annual craft beer festival in Beijing was even held over the weekend. 

People are returning to public spaces such as parks and restaurants, but gaining entry still means submitting to temperature checks and brandishing contact tracing apps. Face masks also continue to be required in many instances.

A woman in Qingdao takes a Covid test last week
A woman in Qingdao takes a Covid test last week

Elevators remain covered with signs limiting the number of people riding at the same time, although security guards are at times growing lax in enforcing the rules as infections have subsided. 

Janitors are also meant to disinfect them several times a day, though The Telegraph has observed a worker adding such cleanings on the sanitation record – displayed in the lift to reassure the public – without actually having done so. 

The flurry is reflected in the numbers. After the world’s second-largest economy contracted a whopping 6.8pc in the first quarter when the coronavirus emerged, China managed 3.2pc growth in the second quarter and now a 4.9pc expansion in the third quarter data released on Monday. 

Car sales are also revving up with a near-13pc rise last month in another positive sign for the economy. Investors have been so optimistic that China’s stock market valuation hit a record $10 trillion last week. 

To help cushion the pandemic's blow, the Government has unleashed a series of economic stimulus measures, lowering the amount banks have to keep on reserve and encouraging lending.

Local governments have also put in place targeted policies to support smaller businesses, such as extending tax deadlines and lowering fees companies have to pay on behalf of employees, for instance into mandatory social security funds. 

While this is good news for China – and gives hope to nations around the world grappling with the pandemic – the situation remains precarious as cluster outbreaks continue to flare up suddenly. 

Coronavirus China Spotlight Chart - Cases default
Coronavirus China Spotlight Chart - Cases default

Last week the coastal city of Qingdao posted a handful of cases - a worrying development as the country’s first local transmissions in nearly two months. Most recent coronavirus cases have come from Chinese returning to the country testing positive upon arrival.

Fears of infection have prompted some schools in Beijing – more than 400 miles away – to again restrict exit and entry. Other institutions are recommending staff stay put over concerns of getting caught in the middle of a surprise outbreak. 

This level of uncertainty is the new normal in China, forcing Johnson-Hill – who has lived here for nearly three decades – to adapt.

Plastered store
Plastered store

While he was able to benefit from some of the government’s fee reductions and negotiated lower rent, he also had to cut salaries and lay off one employee to keep costs down. 

“Watching your cash flow disappear is so depressing,” he says, especially after pulling in record sales last year. “To have all that switched off and that money trickle away … is so disheartening.” 

Hunkering down earlier is beginning to pay off, Johnson-Hill has been boosting salaries back to pre-Covid levels and is looking forward to designing new products for next year. “We’re back into the creative side of reinventing the brand.”