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As new confirmed cases of COVID-19 in China begin to dwindle and businesses gradually return back to work, the impact and effects of the outbreak are still being felt nationwide. CKGSB Business Conditions Index (BCI), a set of forward-looking, diffusion indices that takes 50 as its threshold, registered at37.3in February 2020.

An index value above 50 means that the variable that the index measures is expected to increase, while an index value below 50 means that the variable is expected to fall.

With an 18.9 drop from 56.2 the month before, this drop signals a greatly worsened sentiment on China’s macro economy. In these uncertain times, Chinese companies’ survival and existence were truly put to the test.

An interview with some of our alumni companies showed that many chose to adapt and innovate in the hopes to weather through these difficult times.

Embracing new market demands

When markets and demand change, it is crucial to pinpoint these new demands and adapt accordingly in order for companies to survive.

ITLaser, a laser equipment production company led byCKGSB METI programstudentJiang Lijun, decided to temporarily transform part of its production line to produce masks to meet the skyrocketing demand for this product.

Chang Gen Tang Lithiasis Medical Technology, aCKGSB Chuang Communityalumnus company, set up a telemedicine team to fight COVID-19 soon after the epidemic broke out, and has served nearly 600 patients online to date.

Another alumnus-led company, software and info-tech service provideriSoftStone—built a big data system within 24 hours for the Wuhan government to track the location and flow of people in Wuhan who had traveled to other parts of China during the Spring Festival.

From offline to online

When brick-and-mortar stores were locked down and people were discouraged from social activities due to the outbreak, businesses began to adapt and transition to online platforms.

For companies whose ecosystems were deeply engrained with the Internet the impact was mild, but for others e-commerce became a haven.

Mia.com, an online mother and baby product site led byCKGSBChuang CummunityalumnaLiu Nan, for example, was not heavily impacted by the outbreak as a result of its strong supply chain and e-commerce business model. But other traditional sectors were increasingly turning to online platforms for opportunities.

After the outbreak,Teasure, a chain of Chinese tea shops headed byCKGSB Chuang Communitystudent Liu Fang, quickly adjusted and adapted its business model by leveraging new online media platforms such as Tiktok and working with food delivery companies to deliver their drinks.

Similarly,CKGSB EMBA programalumna Fan Yuled her companyNawa Lifeto shift fitness classes online in light of the epidemic, attracting millions of potential users.

In the face of COVID-19, companies are proactively embracing and working with these challenges.

“For companies to live through difficult times there is no other way than to innovate and adapt to change.”Zhu Rui, Professor of Marketing at CKGSB, said,“But companies need to accumulate in advance hardcore technological strengths, brand awareness and the ability to dig out and pinpoint changing market demands.”

"In Feburary, the CKGSB Business Conditions Index (BCI) hit rock bottom at 37.3, and in March, as people have begun returning to work, a rebound of sorts is reflected in the improved score of 41.3. However, in light of the ongoing and evolving pandemic, which means the impact of government policies in various places will experience a time lag, the rebound remains minimal."said Professor of EconomicsLi Weiin hislatestBusiness Conditions Index(BCI).

Click 'Read more' to check out our latestBusiness Conditions Index(BCI) to stay tuned to China's economic development!

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About CKGSB MBA Program

This accelerated English-language 14-month MBA program helps young professionals transform into global business leaders with a strong understanding of China and other emerging economies. Participants will tap into unique mentoring opportunities that will connect them to the Who’s Who of business in China as they learn from some of the best academics in one of the most dynamic markets in the world.