Big manufacturing hubs on the Chinese coast are starting to loosen curbs on the movement of people and traffic while local governments prod factories to restart production, following weeks of stoppages due to the coronavirus outbreak.
In their early efforts to contain the virus, authorities extended a week-long Lunar New Year holiday in late January by about 10 days, instituted quarantines, and imposed restrictions on traffic in large parts of the country.
The measures slowed the sprawling industrial sector to a crawl, with companies unable to resume production or restore output to normal levels due to a lack of workers. Many have also been unable to take delivery of raw materials or send products to clients due to logistical hurdles, with the disruptions knocking on along supply chains worldwide.
China is conscious of striking a balance between stamping out an epidemic that has infected more than 70,000 people - killing more than 2,000 of them - and shielding the already weakened economy from more damage.
The city of Foshan, a large manufacturer of electronics and household appliances in the southern province of Guangdong, said late on February 18 that businesses no longer needed to seek approval before resuming operations and they need not require returning workers to show proof of their health.
On February 17, the nearby city of Zhongshan similarly lowered such administrative barriers.
In the eastern province of Zhejiang, known for its bustling private sector, the cities of Hangzhou and Ningbo over the weekend also pared back the approval process for companies looking to restart.
"Macro and micro data suggests production activities are resuming at a slow pace in China, reaching 60-80% of normal levels by end-February and normalizing only by mid-to-late March," Morgan Stanley wrote in a research noted.
"If the spread of the virus is not contained within the next two weeks, the disruption to production could extend into the second quarter."
Analysts polled by Reuters expect China's growth could slow to 4.5% in the first quarter from 6% the previous quarter. But some recently downgraded forecasts are in the 3-4% range, citing delays in resuming production.
(Writing by Jessie Jia Editing by Harry Huo)
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