Table.Briefing: China

Interview with hotel manager Gregor Wateler + Vaccination rate among eldery

  • Gregor Wateler from Shangri-La in Shanghai on quarantine business
  • Why are so many elderly still unvaccinated?
  • Shanghai opens shopping malls, Beijing expands measures
  • Habeck worries about consequences of Covid measures
  • Biden backs Taiwan’s alignment with WHO
  • Government bolsters job market for college graduates
  • Hosting of Asia Cup canceled
  • New book on Hong Kong by Julia Haes and Klaus Muehlhahn
Dear reader,

The Shangri-La hotel in Shanghai has just recently installed a go-kart track in the basement and a surfing facility by the pool. If China’s wealthy tourists can’t travel abroad, they spend their money in such luxury resorts.

But the Shangri-La is currently not what it used to be. During the lockdown, it has become a quarantine hotel. Instead of guests coming and going, catering three simultaneous weddings in three ballrooms, only silence reigns, and its doors remain closed. Of 800 employees, only 28 show up for work.

German hotel manager Gregor Wateler is the director of the hotel. Frank Sieren spoke with him about the hotel business amidst the fight against Covid. Being available as a quarantine hotel is still better for the large hotel than having no guests at all. But Wateler wishes for nothing more than a return to normality. What is particularly important in his opinion: “Uniform vaccination systems that apply worldwide, which allow everyone to travel safely and happily”.

It is hard to understand why China does not increase its vaccinations to get out of this predicament. The Chinese government forces millions of people to stay at home permanently in its fight against Covid. It has citizens dragged off, kills pets, and engages in unprecedented testing campaigns. But there is one thing it is not doing: mandatory vaccination for senior citizens. Even now, far too few elderly are protected against severe infections.

Our Beijing team sheds light on the causes. The main reason is almost trivial: There was hardly any psychological strain. After all, China experienced hardly any infections for two years. While Germans were only able to return to normal life thanks to vaccination, China’s elderly simply saw no discernible reason to get vaccinated. Find out what other reservations they have about the jab in today’s analysis.

Your
Finn Mayer-Kuckuk
Image of Finn  Mayer-Kuckuk

Interview

‘International travelers will return’

Gregor Wateler, General Manager of the Shangri-La in Pudong, Shanghai

Mr. Wateler, the Shangri-La in Pudong on the banks of the Huangpu River is the largest 5-star hotel in Shanghai. Now it is a quarantine hotel. Normally, you have around 800 employees to keep it running. How many are there at the moment?

We have downsized to just 28 employees. Our nine restaurants and the service areas are closed. Food is delivered in lunch boxes from outside.

Since when has this been the case?

On March 23, the Shanghai Municipal Government asked us if we would voluntarily offer our hotel for the close contact quarantine. We agreed and since then we have a relatively good occupancy rate with quarantine guests, who, naturally, do not pay as much per night. But without them, we would have no guests at all.

How long will this last?

That depends on how the disease situation develops, of course. But, if the Covid numbers continue to drop as they do now, hopefully, we will get the hotel back this month. Then we will need three to seven days to renovate, clean, and for new installations. After that, we can resume normal operations.

How did the past year go?

Surprisingly well, even though China’s borders have been closed since 2020. China managed to do very well last year. Instead of a lack of international travelers, we had more national travelers coming to us – mostly Chinese, who now were unable to travel internationally. That is how we and many other hotels made it to 70 to 80 percent of 2019 revenue. That was a surprise for us, but the market is just very big. What’s sad: I only saw international guests last year when they had to spend seven days in a normal hotel after 14 days. But we simply adjusted more to the Chinese customers. In 2019, we had 40 percent foreigners. In 2021, it was only 3 percent.

And what has changed?

The Chinese are taking a lot more luxury trips in China. The suites were in high demand. Luxurious food. Expensive wines. And we added more experiences to the hotel. We have a go-kart track in the 2nd basement and a big surf wave in one of our two pools. ‘Surf by the Bund’ is what we call it. These are just attractions that make our customers feel better about the fact that they can’t travel internationally at the moment.

This means you become more and more a resort instead of a business hotel?

We are such a big hotel, so large, that we have to serve both markets equally. After all, we have almost 1,000 rooms. Business travel is rather stable. Leisure is on the rise. Those are the trends for us.

Will the foreigners come back when it is possible to enter the country again?

Yes, of course. Things will then return to normal. China is no less exciting after Covid than before Covid. China is simply a fantastic market. Also, if you look at how more and more high-tech is being used in our industry to reach potential customers and then serve them once they have booked. The booking systems are becoming more and more sophisticated and social media activity is becoming more and more important.

But hasn’t the hard lockdown severely tarnished Shanghai’s appeal?

Shanghai continues to boom and will always remain a metropolis. Commercially, Shanghai will always be big enough. The location is great on the river with the harbor. But in the past, people thought it would somehow become the New York of China. Diverse, contrasting, international. I hope it doesn’t all become the same as time goes on. Shanghai must continue to be different from Guangzhou or Singapore. How to be different should be considered now more than ever.

Do you see China decoupling from the world?

I don’t see this trend being very pronounced. The Shangri-La Group is a Hong Kong company. We work with a wide variety of nations. Expats going to China as well as Chinese going to Singapore, France, Canada, or Australia to our hotels. I can’t see any decoupling trend. And: 50 to 60 percent of the Shangri-La Group’s revenue comes from China.

And what about hotel management? Do Western hotel employees and managers even want to go to China anymore?

China is simply in a different league when it comes to managing hotels. If I look at a normal day in my hotel, I have 700 to 800 guests, a congress, three weddings and nine full restaurants. You don’t find anything like that in peaceful Europe. This challenge is the crowning achievement for many Westerners in the hotel industry. So we have no problems at all recruiting Western hotel managers. At the same time, however, Chinese staff is getting better and better. It will be my job again to balance this out as soon as the situation normalizes.

What do you demand from the government to normalize the situation?

We don’t have any demands, more dreams and wishes. For us, of course, travel must start again. It’s part of human nature and extremely important in times of globalization. No Zoom call can replace direct interaction. You have to experience the dynamics of China for yourself. Of course, it’s not enough to just read about it in the newspaper or have your employees tell you about it. That’s why our greatest wish is for the borders to be opened again, for flights to come in as frequently as they used to, and for uniform vaccination systems that apply worldwide, which allow everyone to travel safely and happily.

Gregor Wateler (55) has been General Manager of Shanghai’s Shangri-La Hotel, the largest 5-star hotel in Shanghai with 950 rooms, for almost five years. Typically, the hotel generates more than €100 million in revenue annually. Wateler has worked for the Hong Kong Shangri-La Group for more than 22 years and has lived in China for 18 years. The German trained at the Glion Institute of Higher Education, one of the world’s most prestigious hotel management schools in Montreux, Switzerland.

  • Coronavirus
  • Health
  • Tourism
  • Travel

Feature

Zero-covid policy stands in the way of vaccines for the elderly

China devotes enormous capacities to maintaining its zero-Covid policy. Lockdowns and mass testing weigh heavily on the economy. Tens of millions of people are cooped up in their homes or quarantine centers – often against their will.

Against the backdrop of the draconian measures and the stridency with which authorities enforce their zero-Covid policy, it is surprising that almost two years after its launch, the Chinese vaccination campaign is still, at least officially, voluntary. There is no general vaccine mandate.

The percentage of unvaccinated is still particularly high among older people. According to the National Health Commission, nearly 42 million over the age of 60 are still unvaccinated. More than 100 million have not yet received booster shots. As people age, their willingness to be vaccinated continues to wane: The percentage of elderly who have received their first dose is

  • 88.8 percent for people in their 60s,
  • 86.1 percent for those in their 70s, and only
  • 58.8 percent for people over the age of 80.

China’s vaccination gap: problems started early

The reasons why China has such a dramatically low vaccination rate in these particularly high-risk age groups are complex. When the pandemic hit, the government immediately imposed strict curfews. Then, when the vaccination campaign started, the country was largely free of Covid, so authorities decided to vaccinate the working population first, and only afterward the elderly. Many older people saw no benefit in the vaccine, since there were few infections anyway. At the same time, the government never managed to address fears about possible side effects and risks of the vaccines.

Local practitioners encounter many concerns and reservations. “Elderly people often have cardiovascular problems or diabetes, so they worry that vaccination will harm them,” a social worker in Beijing’s Chaoyang district recently described the situation on the front lines to the Chinese business magazine Caixin. “Because we have to stick to the principle of voluntary vaccination, we are also unable to force anyone. We can only call them again and again,” the aid worker said.

Science author Leng Zhe sees another problem: senior citizens have less “tightly-knit social networks” than younger population groups, and therefore do not face as much pressure to be vaccinated. Although there is no vaccination mandate in China, most employers, schools, and associations have introduced rules that make vaccination compulsory in practice. Just not for the elderly.

Elderly feel no pressure to get vaccinated so far

According to Caixin, an interesting effect can be observed here: In cities experiencing a Covid outbreak, the willingness of the elderly to get vaccinated suddenly increases rapidly. Yet often the zero-Covid policy, of all things, then gets in the way of swift vaccination. “The officials tasked with improving vaccination rates are usually the same ones who must ensure the situation is quickly brought back under control in the event of an outbreak,” Caixin writes. But currently, more than 20 provinces are struggling with outbreaks. The work of many medical professionals has shifted from vaccinations to testing. Some regions have even put their vaccination campaigns on hold altogether, according to Caixin.

Scientists at Fudan University have reached a clear conclusion in a recent study. According to their analysis, published this week by the scientific journal Nature Medicine, there could be 112 million symptomatic infections within six months if China were to completely abandon its zero-Covid policy overnight (China.Table reported). ICUs would be overwhelmed: Demand would be 15.6 times greater than capacity. In a worst-case scenario, the highly contagious Omicron variant could potentially lead to 5.1 million hospital admissions. 1.5 million people could die.

However, the authors also show how the number of deaths and infections could be reduced by implementing an adapted strategy. Vaccinations, including boosters and campaigns for people older than 60, as well as antiviral therapies and contact restrictions, would play a “key role”. A combination would be necessary, as none of the proposals alone would be able to bring the fatality rate down to the level of usual flu waves (88,000 deaths). “Whether and for how long a zero-Covid policy can remain in place is questionable,” the authors write. Joern Petring/Gregor Koppenburg

  • Coronavirus
  • Demographics
  • Health
  • Society

News

First stores reopen in Shanghai

Covid-stricken Shanghai shows first signs of opening. On Monday, following a six-week lockdown, the first stores were allowed to reopen. Among them are shopping malls, hair salons, and stores for daily necessities. This was announced by Vice Mayor Chen Tong on Sunday at the regular press conference of the disease control committee. He said the city was making it possible for staff to return to their jobs to promote the opening to first retailers and service providers.

Vice Mayor Chen also outlined the further opening strategy on Sunday. An “orderly lifting of measures with continued restriction of mobility and continued strict monitoring” should allow the economy to restart. He added that a separate task force would take care of the port’s operations and maintain foreign trade.

Meanwhile, the city of Beijing continues to ramp up its response to local outbreaks. It designated four more streets as risk areas on Sunday. It also extended and confirmed the home office requirement for four city districts. It has also applied since Thursday to Chaoyang, with its three and a half million residents and many foreign companies. In Beijing, 55 new cases were reported on Sunday. Authorities stressed that ten of them were in places not yet affected by the pre-lockdowns. So the virus could currently expand outside areas with already existing restrictions.

On Sunday, the number of newly detected infections reported daily throughout China dropped to 1,789. On Saturday, it was still 2,072, which marks a clear downward trend. Of the infections found, only 239 were symptomatic. Most of the others turned up during mass testing. The National Health Commission reported three new Covid-19-related deaths. fin

  • Beijing
  • Coronavirus
  • Health

Berlin eyes zero-Covid policy with concern

The German government looks with concern at the consequences of China’s zero-Covid policy. “If China continues to be affected by lockdowns, new supply bottlenecks and a slowdown in world trade are possible,” according to the monthly report of the Ministry of Economics published on Friday. The forecast for German foreign trade in the coming months is “mixed,” it said. The situation of the port in Shanghai also has the German government worried: “Around three percent of global container freight capacity is currently stuck in a traffic jam outside the port of Shanghai,” the monthly report says.

Overall, Robert Habeck’s department continues to expect headwinds for the German economy. The outlook is “under the sign of the still high price pressure and the still uncertain duration and outcome of the Russian war of aggression in Ukraine”. In the coming months, inflation and uncertainty over the war in Ukraine will weigh on consumer confidence.

Initial data and assessments confirm a direct impact on Germany. Volkswagen shipped 40 percent fewer vehicles worldwide in April – due to supply chain disruptions and the downturn in the Chinese market. In China itself, sales halved, in line with the overall market trend (China.Table reported). Automotive expert Ferdinand Dudenhoeffer, therefore, expects a global market slump as a result of supply difficulties and lockdowns. rtr/ari/fin

  • Health
  • Trade
  • Ukraine

USA supports Taiwan’s observer status at WHO

On Friday, US President Joe Biden signed a bill to help Taiwan regain its lost observer status at the World Health Assembly (WHA). The House of Representatives had passed the bill in late April without dissenting votes. The Republican and Democratic lawmakers who introduced it praised the president for his “support for Taiwan’s engagement”. Taiwan was making “immense contributions” to health protection, so the State Department should work to undermine China’s obstructionism.

The Senate of the Czech Republic, the second chamber of the Czech Parliament, also passed a resolution on May 11 calling for the reinstatement of Taiwan as an observer to the WHA. From 2009 to 2016, Taiwan was represented in the assembly without voting rights. The body controls the World Health Organization (WHO). It will meet in Geneva starting Sunday. Taiwan plans to send a delegation led by Deputy Health Minister Lee Li-fen 李麗芬. fin

  • Geopolitics
  • Taiwan
  • USA
  • WHO

Government start-up aid for university graduates

China expects a record number of university graduates and wants to promote their recruitment by companies. Smaller companies hiring such candidates are to be provided with subsidies, according to the State Council. Graduates who set up a start-up will receive tax breaks and better loan conditions. In addition, free business and office space will be offered. “China … encourages employers in COVID-hit regions to sign labor contracts with college graduates online,” it added.

This year, around eleven million Chinese will finish their studies and enter the job market. However, the job market is currently not in good shape: Unemployment in cities is currently at 5.8 percent, the highest level in almost two years, according to official statistics. At the same time, 16 percent of 16- to 24-year-olds are currently looking for a job – the highest number since July 2021. The government aims to create more than 11 million new jobs in urban areas this year, Premier Li Keqiang announced. Most recently, however, he described the employment situation as “complicated and grave”. “Stabilizing employment is critical to people’s livelihood, and is the key support for the economy to run within a reasonable range,” Li said.

Faced with growing economic risks and a record number of new graduates entering the job market, the pressure on the government to create enough jobs is growing. The economic outlook is clouded on the one hand by increased energy and raw material prices as a result of the Russian war against Ukraine, and on the other by the recent Covid wave. rtr

  • Education
  • Science
  • Society
  • Universities

Withdrawal from Asia Cup hosting in 2023

China will not host the Asian Football Championships next year. Citing the Covid pandemic, the country has canceled the staging of the Asia Cup, the Asian Football Confederation (AFC) announced Saturday. “Following extensive discussions with the Chinese Football Association (CFA), the AFC has been officially informed by the CFA that it would not be able to host the AFC Asian Cup,” a statement read. The 24-team event was scheduled to be held in ten Chinese cities from June 16 to July 16, 2023. The AFC is now looking for a new host country.

Now that China has completed the Olympic Games with an enormous effort, it has canceled one sporting event after another. It has already handed over the hosting of the final of the 2022 East Asian Football Championship to Japan in July. The Asian Games, originally scheduled to be held in Hangzhou in September, have also been postponed due to the pandemic (China.Table reported). fin

  • Coronavirus
  • Health
  • Soccer
  • Sports

Opinion

Hong Kong: city in resistance

by Julia Haes and Klaus Muehlhahn
Julia Haes, Founder of the China Institute for German Business, and Klaus Muehlhahn, Sinologist and President at Zeppelin University.

Just three days after the appointment of known hardliner John Lee as the new Chief Executive, Hong Kong police detained four well-known supporters of the 2019 democracy activists. In addition to prominent 90-year-old Cardinal Joseph Zen, they included lawyer and former opposition MP Margaret Ng, Kanto pop singer and Canadian citizen Denise Ho, and university professor Hui Po-keung.

John Lee was the only candidate in the election for Chief Executive and won 99.2 percent of the 1,428 votes cast. He had already worked in the police force of the British colonial administration since the 1970s and was most recently Secretary for Security before his election. Thus, the Hong Kong government’s handling of the 2019 protests also fell under his jurisdiction.

The arrest of the four high-profile democracy activists shows how nervous and fearful the Chinese government is. Beijing has always feared that protests and criticism could erupt again in the city and spread to the mainland. This would be the ultimate disaster for Beijing, especially in a crisis situation like the present one with the Covid chaos and a massive slump in the economy.

Beijing wants to avoid protests at all costs

Until ten years ago, Hong Kong was known primarily as a booming business metropolis. Many reports portrayed Hong Kong’s citizens primarily as economic players and entrepreneurs who were not interested in politics. To a certain extent, this is true, but our book also shows another side of the story.

The first protests already erupted in 1898, when the New Territories were leased to the United Kingdom for 99 years. Throughout the 20th century, too, the population repeatedly rebelled against British foreign rule and social injustice. Much of this history has simply been suppressed. The occupation of Hong Kong, as well as the darker aspects of British rule, would have made Britain look bad, so many accounts simply omitted this dimension. It is only in recent years that Hong Kong’s identity as a “city of protest” has truly emerged and gained global attention, first through the Umbrella Movement of 2014, but then, especially through the protests of 2019. Since then, the word “Hong Kong” has taken on a different meaning.

Hong Kong – once a dynamic press landscape

Even during British rule, these oppositions gave rise not only to a dynamic economic metropolis but also to a vibrant and creative civil society, which continued to thrive even after the city was returned to China in 1997. Since the political structures hardly allowed for genuine participation by the population, many issues were negotiated elsewhere. Hong Kongers discussed their concerns in universities, debate clubs, and bookstores, in public squares, and the press. The diversity and dynamism of the press landscape were remarkable, even by global standards. Nowhere were there so many small and large publishing houses, editorial offices, and online media in such a small area. For many years, the best China coverage came from Hong Kong.

This is not surprising, as the history of Hong Kong has been closely tied to Chinese history from the very beginning. Important events in China have always had a direct influence on Hong Kong. For example, Sun Yat-sen’s revolutionaries planned their uprisings from Hong Kong as early as 1900. After the Second World War, Hong Kong was the bridgehead of the West to fight communism and at the same time China’s only gateway to the world. Since Hong Kong’s founding, Chinese who had migrated from the mainland made up the majority of Hong Kong’s population. Some fled because of the political situation, others came as workers. They adjusted and at the same time helped shape a unique identity for Hong Kong. Through continued family and economic ties with the mainland, Hong Kong was an important helper and enabler for China into the 2010s. Conversely, Hong Kong’s economy benefited tremendously from China’s economic rise.

Xi Jinping’s inauguration is a turning point

The turning point came around 2013 when Xi Jinping became Chinese president. The Mainland government began to interfere more in Hong Kong. It was unhappy with the way the Hong Kong government was handling the citizens’ protests. In turn, the latter experienced a Hong Kong government that did not understand their problems – or was unwilling to address them. The situation continued to escalate, culminating in the protests of 2014 and 2019.

In response to the 2019 protests, the Mainland government took severe measures against the democracy movement and the city’s free media. The national security laws issued in June 2020 are very broad and deliberately vague. They prohibit sedition, subversion, collusion with foreign powers, and terrorism, but no clear definitions are provided for these activities. Since the law’s introduction, more than 180 individuals have been arrested for chanting protest slogans, clapping in court, and criticizing the government’s Covid response.

Many citizens of Hong Kong have left the city. In our conversations and interviews with the people of Hong Kong, we often encountered an immense feeling of despair. They are afraid that they will no longer be able to live in the city, and that their home will cease to exist in the form to which they are accustomed. The pace at which people are leaving Hong Kong has increased recently, due to both national security legislation and, more recently, the draconian zero-Covid policy. As many as 300,000 people could turn their backs on the city in the next few years. In many areas of the world, there has been real growth in Hong Kong exile communities. There is hope that outside the city, Hong Kong life and Hong Kong’s distinctive culture will continue and thrive.

With the continued suppression of civil liberties, the increasing persecution of government critics, and the general climate of fear, Hong Kong’s role as a city of innovation and creativity is in jeopardy. This is a huge problem for a city that based its existence on being not just an economic center of global significance, but also of free exchange and criticism. But it is equally a great loss for Mainland China, even if China does not want to admit it.

Julia Haes is Managing Director of the China Institute for German Business in Munich and CEO of Finiens. Both companies advise Chinese and German companies. In the podcast “China ungeschminkt” she talks with Klaus Muehlhahn and Anja Blanke about China-related topics.

Klaus Muehlhahn is a Professor of Sinology and President of Zeppelin University in Friedrichshafen, Germany. Previously, he served as Vice President of the Free University of Berlin. Muehlhahn is considered a leading expert on China, and in 2009 he was awarded the John King Fairbank Prize by the American Historical Association. Last year, Muehlhahn’s book “Making China Modern: From the Great Qing to XI Jinping ” was published in the “Historical Library of the Gerda Henkel Foundation”.

Today, Monday, May 16th, their newest book “Hongkong: Umkämpfe Metropole. Von 1841 bis heute” (Hong Kong: A contested metropolis. From 1841 to present day), is released by Verlag Herder.

  • Civil Society
  • Hongkong
  • Human Rights
  • Regenschirm-Bewegung
  • Society

Executive Moves

Alexis Tsang and Philip Sun will jointly head Equities Sales in China at US investment bank Goldman Sachs. Tsang will also lead the bank’s hedge fund business along with Laurianne Curtil and Fred Grunberger.

Tim Tu and Aaron Oh will head the financing division for the Asia-Pacific region at the major Swiss bank Credit Suisse. They will operate out of the Hong Kong office. Tu had only left his job as head of the Swiss bank’s Chinese securities joint venture in April.

  • credit suisse
  • Goldman Sachs

Dessert

What looks like the dusty imprint of a moth are actually the remains of creatures that roamed the Earth’s oceans around 485 million years ago: The trilobites documented in Zhenxiong in southwest China’s Yunnan Province are providing researchers with new insights into the extinct class of marine creatures. The discovery by scientists from Peking University, the Nanjing Institute of Geology and Paleontology of the Chinese Academy of Sciences and the Xi’an Geological Survey Center was recently published in the journal Palaeoworld.

China.Table editorial office

CHINA.TABLE EDITORIAL OFFICE

Licenses:
    • Gregor Wateler from Shangri-La in Shanghai on quarantine business
    • Why are so many elderly still unvaccinated?
    • Shanghai opens shopping malls, Beijing expands measures
    • Habeck worries about consequences of Covid measures
    • Biden backs Taiwan’s alignment with WHO
    • Government bolsters job market for college graduates
    • Hosting of Asia Cup canceled
    • New book on Hong Kong by Julia Haes and Klaus Muehlhahn
    Dear reader,

    The Shangri-La hotel in Shanghai has just recently installed a go-kart track in the basement and a surfing facility by the pool. If China’s wealthy tourists can’t travel abroad, they spend their money in such luxury resorts.

    But the Shangri-La is currently not what it used to be. During the lockdown, it has become a quarantine hotel. Instead of guests coming and going, catering three simultaneous weddings in three ballrooms, only silence reigns, and its doors remain closed. Of 800 employees, only 28 show up for work.

    German hotel manager Gregor Wateler is the director of the hotel. Frank Sieren spoke with him about the hotel business amidst the fight against Covid. Being available as a quarantine hotel is still better for the large hotel than having no guests at all. But Wateler wishes for nothing more than a return to normality. What is particularly important in his opinion: “Uniform vaccination systems that apply worldwide, which allow everyone to travel safely and happily”.

    It is hard to understand why China does not increase its vaccinations to get out of this predicament. The Chinese government forces millions of people to stay at home permanently in its fight against Covid. It has citizens dragged off, kills pets, and engages in unprecedented testing campaigns. But there is one thing it is not doing: mandatory vaccination for senior citizens. Even now, far too few elderly are protected against severe infections.

    Our Beijing team sheds light on the causes. The main reason is almost trivial: There was hardly any psychological strain. After all, China experienced hardly any infections for two years. While Germans were only able to return to normal life thanks to vaccination, China’s elderly simply saw no discernible reason to get vaccinated. Find out what other reservations they have about the jab in today’s analysis.

    Your
    Finn Mayer-Kuckuk
    Image of Finn  Mayer-Kuckuk

    Interview

    ‘International travelers will return’

    Gregor Wateler, General Manager of the Shangri-La in Pudong, Shanghai

    Mr. Wateler, the Shangri-La in Pudong on the banks of the Huangpu River is the largest 5-star hotel in Shanghai. Now it is a quarantine hotel. Normally, you have around 800 employees to keep it running. How many are there at the moment?

    We have downsized to just 28 employees. Our nine restaurants and the service areas are closed. Food is delivered in lunch boxes from outside.

    Since when has this been the case?

    On March 23, the Shanghai Municipal Government asked us if we would voluntarily offer our hotel for the close contact quarantine. We agreed and since then we have a relatively good occupancy rate with quarantine guests, who, naturally, do not pay as much per night. But without them, we would have no guests at all.

    How long will this last?

    That depends on how the disease situation develops, of course. But, if the Covid numbers continue to drop as they do now, hopefully, we will get the hotel back this month. Then we will need three to seven days to renovate, clean, and for new installations. After that, we can resume normal operations.

    How did the past year go?

    Surprisingly well, even though China’s borders have been closed since 2020. China managed to do very well last year. Instead of a lack of international travelers, we had more national travelers coming to us – mostly Chinese, who now were unable to travel internationally. That is how we and many other hotels made it to 70 to 80 percent of 2019 revenue. That was a surprise for us, but the market is just very big. What’s sad: I only saw international guests last year when they had to spend seven days in a normal hotel after 14 days. But we simply adjusted more to the Chinese customers. In 2019, we had 40 percent foreigners. In 2021, it was only 3 percent.

    And what has changed?

    The Chinese are taking a lot more luxury trips in China. The suites were in high demand. Luxurious food. Expensive wines. And we added more experiences to the hotel. We have a go-kart track in the 2nd basement and a big surf wave in one of our two pools. ‘Surf by the Bund’ is what we call it. These are just attractions that make our customers feel better about the fact that they can’t travel internationally at the moment.

    This means you become more and more a resort instead of a business hotel?

    We are such a big hotel, so large, that we have to serve both markets equally. After all, we have almost 1,000 rooms. Business travel is rather stable. Leisure is on the rise. Those are the trends for us.

    Will the foreigners come back when it is possible to enter the country again?

    Yes, of course. Things will then return to normal. China is no less exciting after Covid than before Covid. China is simply a fantastic market. Also, if you look at how more and more high-tech is being used in our industry to reach potential customers and then serve them once they have booked. The booking systems are becoming more and more sophisticated and social media activity is becoming more and more important.

    But hasn’t the hard lockdown severely tarnished Shanghai’s appeal?

    Shanghai continues to boom and will always remain a metropolis. Commercially, Shanghai will always be big enough. The location is great on the river with the harbor. But in the past, people thought it would somehow become the New York of China. Diverse, contrasting, international. I hope it doesn’t all become the same as time goes on. Shanghai must continue to be different from Guangzhou or Singapore. How to be different should be considered now more than ever.

    Do you see China decoupling from the world?

    I don’t see this trend being very pronounced. The Shangri-La Group is a Hong Kong company. We work with a wide variety of nations. Expats going to China as well as Chinese going to Singapore, France, Canada, or Australia to our hotels. I can’t see any decoupling trend. And: 50 to 60 percent of the Shangri-La Group’s revenue comes from China.

    And what about hotel management? Do Western hotel employees and managers even want to go to China anymore?

    China is simply in a different league when it comes to managing hotels. If I look at a normal day in my hotel, I have 700 to 800 guests, a congress, three weddings and nine full restaurants. You don’t find anything like that in peaceful Europe. This challenge is the crowning achievement for many Westerners in the hotel industry. So we have no problems at all recruiting Western hotel managers. At the same time, however, Chinese staff is getting better and better. It will be my job again to balance this out as soon as the situation normalizes.

    What do you demand from the government to normalize the situation?

    We don’t have any demands, more dreams and wishes. For us, of course, travel must start again. It’s part of human nature and extremely important in times of globalization. No Zoom call can replace direct interaction. You have to experience the dynamics of China for yourself. Of course, it’s not enough to just read about it in the newspaper or have your employees tell you about it. That’s why our greatest wish is for the borders to be opened again, for flights to come in as frequently as they used to, and for uniform vaccination systems that apply worldwide, which allow everyone to travel safely and happily.

    Gregor Wateler (55) has been General Manager of Shanghai’s Shangri-La Hotel, the largest 5-star hotel in Shanghai with 950 rooms, for almost five years. Typically, the hotel generates more than €100 million in revenue annually. Wateler has worked for the Hong Kong Shangri-La Group for more than 22 years and has lived in China for 18 years. The German trained at the Glion Institute of Higher Education, one of the world’s most prestigious hotel management schools in Montreux, Switzerland.

    • Coronavirus
    • Health
    • Tourism
    • Travel

    Feature

    Zero-covid policy stands in the way of vaccines for the elderly

    China devotes enormous capacities to maintaining its zero-Covid policy. Lockdowns and mass testing weigh heavily on the economy. Tens of millions of people are cooped up in their homes or quarantine centers – often against their will.

    Against the backdrop of the draconian measures and the stridency with which authorities enforce their zero-Covid policy, it is surprising that almost two years after its launch, the Chinese vaccination campaign is still, at least officially, voluntary. There is no general vaccine mandate.

    The percentage of unvaccinated is still particularly high among older people. According to the National Health Commission, nearly 42 million over the age of 60 are still unvaccinated. More than 100 million have not yet received booster shots. As people age, their willingness to be vaccinated continues to wane: The percentage of elderly who have received their first dose is

    • 88.8 percent for people in their 60s,
    • 86.1 percent for those in their 70s, and only
    • 58.8 percent for people over the age of 80.

    China’s vaccination gap: problems started early

    The reasons why China has such a dramatically low vaccination rate in these particularly high-risk age groups are complex. When the pandemic hit, the government immediately imposed strict curfews. Then, when the vaccination campaign started, the country was largely free of Covid, so authorities decided to vaccinate the working population first, and only afterward the elderly. Many older people saw no benefit in the vaccine, since there were few infections anyway. At the same time, the government never managed to address fears about possible side effects and risks of the vaccines.

    Local practitioners encounter many concerns and reservations. “Elderly people often have cardiovascular problems or diabetes, so they worry that vaccination will harm them,” a social worker in Beijing’s Chaoyang district recently described the situation on the front lines to the Chinese business magazine Caixin. “Because we have to stick to the principle of voluntary vaccination, we are also unable to force anyone. We can only call them again and again,” the aid worker said.

    Science author Leng Zhe sees another problem: senior citizens have less “tightly-knit social networks” than younger population groups, and therefore do not face as much pressure to be vaccinated. Although there is no vaccination mandate in China, most employers, schools, and associations have introduced rules that make vaccination compulsory in practice. Just not for the elderly.

    Elderly feel no pressure to get vaccinated so far

    According to Caixin, an interesting effect can be observed here: In cities experiencing a Covid outbreak, the willingness of the elderly to get vaccinated suddenly increases rapidly. Yet often the zero-Covid policy, of all things, then gets in the way of swift vaccination. “The officials tasked with improving vaccination rates are usually the same ones who must ensure the situation is quickly brought back under control in the event of an outbreak,” Caixin writes. But currently, more than 20 provinces are struggling with outbreaks. The work of many medical professionals has shifted from vaccinations to testing. Some regions have even put their vaccination campaigns on hold altogether, according to Caixin.

    Scientists at Fudan University have reached a clear conclusion in a recent study. According to their analysis, published this week by the scientific journal Nature Medicine, there could be 112 million symptomatic infections within six months if China were to completely abandon its zero-Covid policy overnight (China.Table reported). ICUs would be overwhelmed: Demand would be 15.6 times greater than capacity. In a worst-case scenario, the highly contagious Omicron variant could potentially lead to 5.1 million hospital admissions. 1.5 million people could die.

    However, the authors also show how the number of deaths and infections could be reduced by implementing an adapted strategy. Vaccinations, including boosters and campaigns for people older than 60, as well as antiviral therapies and contact restrictions, would play a “key role”. A combination would be necessary, as none of the proposals alone would be able to bring the fatality rate down to the level of usual flu waves (88,000 deaths). “Whether and for how long a zero-Covid policy can remain in place is questionable,” the authors write. Joern Petring/Gregor Koppenburg

    • Coronavirus
    • Demographics
    • Health
    • Society

    News

    First stores reopen in Shanghai

    Covid-stricken Shanghai shows first signs of opening. On Monday, following a six-week lockdown, the first stores were allowed to reopen. Among them are shopping malls, hair salons, and stores for daily necessities. This was announced by Vice Mayor Chen Tong on Sunday at the regular press conference of the disease control committee. He said the city was making it possible for staff to return to their jobs to promote the opening to first retailers and service providers.

    Vice Mayor Chen also outlined the further opening strategy on Sunday. An “orderly lifting of measures with continued restriction of mobility and continued strict monitoring” should allow the economy to restart. He added that a separate task force would take care of the port’s operations and maintain foreign trade.

    Meanwhile, the city of Beijing continues to ramp up its response to local outbreaks. It designated four more streets as risk areas on Sunday. It also extended and confirmed the home office requirement for four city districts. It has also applied since Thursday to Chaoyang, with its three and a half million residents and many foreign companies. In Beijing, 55 new cases were reported on Sunday. Authorities stressed that ten of them were in places not yet affected by the pre-lockdowns. So the virus could currently expand outside areas with already existing restrictions.

    On Sunday, the number of newly detected infections reported daily throughout China dropped to 1,789. On Saturday, it was still 2,072, which marks a clear downward trend. Of the infections found, only 239 were symptomatic. Most of the others turned up during mass testing. The National Health Commission reported three new Covid-19-related deaths. fin

    • Beijing
    • Coronavirus
    • Health

    Berlin eyes zero-Covid policy with concern

    The German government looks with concern at the consequences of China’s zero-Covid policy. “If China continues to be affected by lockdowns, new supply bottlenecks and a slowdown in world trade are possible,” according to the monthly report of the Ministry of Economics published on Friday. The forecast for German foreign trade in the coming months is “mixed,” it said. The situation of the port in Shanghai also has the German government worried: “Around three percent of global container freight capacity is currently stuck in a traffic jam outside the port of Shanghai,” the monthly report says.

    Overall, Robert Habeck’s department continues to expect headwinds for the German economy. The outlook is “under the sign of the still high price pressure and the still uncertain duration and outcome of the Russian war of aggression in Ukraine”. In the coming months, inflation and uncertainty over the war in Ukraine will weigh on consumer confidence.

    Initial data and assessments confirm a direct impact on Germany. Volkswagen shipped 40 percent fewer vehicles worldwide in April – due to supply chain disruptions and the downturn in the Chinese market. In China itself, sales halved, in line with the overall market trend (China.Table reported). Automotive expert Ferdinand Dudenhoeffer, therefore, expects a global market slump as a result of supply difficulties and lockdowns. rtr/ari/fin

    • Health
    • Trade
    • Ukraine

    USA supports Taiwan’s observer status at WHO

    On Friday, US President Joe Biden signed a bill to help Taiwan regain its lost observer status at the World Health Assembly (WHA). The House of Representatives had passed the bill in late April without dissenting votes. The Republican and Democratic lawmakers who introduced it praised the president for his “support for Taiwan’s engagement”. Taiwan was making “immense contributions” to health protection, so the State Department should work to undermine China’s obstructionism.

    The Senate of the Czech Republic, the second chamber of the Czech Parliament, also passed a resolution on May 11 calling for the reinstatement of Taiwan as an observer to the WHA. From 2009 to 2016, Taiwan was represented in the assembly without voting rights. The body controls the World Health Organization (WHO). It will meet in Geneva starting Sunday. Taiwan plans to send a delegation led by Deputy Health Minister Lee Li-fen 李麗芬. fin

    • Geopolitics
    • Taiwan
    • USA
    • WHO

    Government start-up aid for university graduates

    China expects a record number of university graduates and wants to promote their recruitment by companies. Smaller companies hiring such candidates are to be provided with subsidies, according to the State Council. Graduates who set up a start-up will receive tax breaks and better loan conditions. In addition, free business and office space will be offered. “China … encourages employers in COVID-hit regions to sign labor contracts with college graduates online,” it added.

    This year, around eleven million Chinese will finish their studies and enter the job market. However, the job market is currently not in good shape: Unemployment in cities is currently at 5.8 percent, the highest level in almost two years, according to official statistics. At the same time, 16 percent of 16- to 24-year-olds are currently looking for a job – the highest number since July 2021. The government aims to create more than 11 million new jobs in urban areas this year, Premier Li Keqiang announced. Most recently, however, he described the employment situation as “complicated and grave”. “Stabilizing employment is critical to people’s livelihood, and is the key support for the economy to run within a reasonable range,” Li said.

    Faced with growing economic risks and a record number of new graduates entering the job market, the pressure on the government to create enough jobs is growing. The economic outlook is clouded on the one hand by increased energy and raw material prices as a result of the Russian war against Ukraine, and on the other by the recent Covid wave. rtr

    • Education
    • Science
    • Society
    • Universities

    Withdrawal from Asia Cup hosting in 2023

    China will not host the Asian Football Championships next year. Citing the Covid pandemic, the country has canceled the staging of the Asia Cup, the Asian Football Confederation (AFC) announced Saturday. “Following extensive discussions with the Chinese Football Association (CFA), the AFC has been officially informed by the CFA that it would not be able to host the AFC Asian Cup,” a statement read. The 24-team event was scheduled to be held in ten Chinese cities from June 16 to July 16, 2023. The AFC is now looking for a new host country.

    Now that China has completed the Olympic Games with an enormous effort, it has canceled one sporting event after another. It has already handed over the hosting of the final of the 2022 East Asian Football Championship to Japan in July. The Asian Games, originally scheduled to be held in Hangzhou in September, have also been postponed due to the pandemic (China.Table reported). fin

    • Coronavirus
    • Health
    • Soccer
    • Sports

    Opinion

    Hong Kong: city in resistance

    by Julia Haes and Klaus Muehlhahn
    Julia Haes, Founder of the China Institute for German Business, and Klaus Muehlhahn, Sinologist and President at Zeppelin University.

    Just three days after the appointment of known hardliner John Lee as the new Chief Executive, Hong Kong police detained four well-known supporters of the 2019 democracy activists. In addition to prominent 90-year-old Cardinal Joseph Zen, they included lawyer and former opposition MP Margaret Ng, Kanto pop singer and Canadian citizen Denise Ho, and university professor Hui Po-keung.

    John Lee was the only candidate in the election for Chief Executive and won 99.2 percent of the 1,428 votes cast. He had already worked in the police force of the British colonial administration since the 1970s and was most recently Secretary for Security before his election. Thus, the Hong Kong government’s handling of the 2019 protests also fell under his jurisdiction.

    The arrest of the four high-profile democracy activists shows how nervous and fearful the Chinese government is. Beijing has always feared that protests and criticism could erupt again in the city and spread to the mainland. This would be the ultimate disaster for Beijing, especially in a crisis situation like the present one with the Covid chaos and a massive slump in the economy.

    Beijing wants to avoid protests at all costs

    Until ten years ago, Hong Kong was known primarily as a booming business metropolis. Many reports portrayed Hong Kong’s citizens primarily as economic players and entrepreneurs who were not interested in politics. To a certain extent, this is true, but our book also shows another side of the story.

    The first protests already erupted in 1898, when the New Territories were leased to the United Kingdom for 99 years. Throughout the 20th century, too, the population repeatedly rebelled against British foreign rule and social injustice. Much of this history has simply been suppressed. The occupation of Hong Kong, as well as the darker aspects of British rule, would have made Britain look bad, so many accounts simply omitted this dimension. It is only in recent years that Hong Kong’s identity as a “city of protest” has truly emerged and gained global attention, first through the Umbrella Movement of 2014, but then, especially through the protests of 2019. Since then, the word “Hong Kong” has taken on a different meaning.

    Hong Kong – once a dynamic press landscape

    Even during British rule, these oppositions gave rise not only to a dynamic economic metropolis but also to a vibrant and creative civil society, which continued to thrive even after the city was returned to China in 1997. Since the political structures hardly allowed for genuine participation by the population, many issues were negotiated elsewhere. Hong Kongers discussed their concerns in universities, debate clubs, and bookstores, in public squares, and the press. The diversity and dynamism of the press landscape were remarkable, even by global standards. Nowhere were there so many small and large publishing houses, editorial offices, and online media in such a small area. For many years, the best China coverage came from Hong Kong.

    This is not surprising, as the history of Hong Kong has been closely tied to Chinese history from the very beginning. Important events in China have always had a direct influence on Hong Kong. For example, Sun Yat-sen’s revolutionaries planned their uprisings from Hong Kong as early as 1900. After the Second World War, Hong Kong was the bridgehead of the West to fight communism and at the same time China’s only gateway to the world. Since Hong Kong’s founding, Chinese who had migrated from the mainland made up the majority of Hong Kong’s population. Some fled because of the political situation, others came as workers. They adjusted and at the same time helped shape a unique identity for Hong Kong. Through continued family and economic ties with the mainland, Hong Kong was an important helper and enabler for China into the 2010s. Conversely, Hong Kong’s economy benefited tremendously from China’s economic rise.

    Xi Jinping’s inauguration is a turning point

    The turning point came around 2013 when Xi Jinping became Chinese president. The Mainland government began to interfere more in Hong Kong. It was unhappy with the way the Hong Kong government was handling the citizens’ protests. In turn, the latter experienced a Hong Kong government that did not understand their problems – or was unwilling to address them. The situation continued to escalate, culminating in the protests of 2014 and 2019.

    In response to the 2019 protests, the Mainland government took severe measures against the democracy movement and the city’s free media. The national security laws issued in June 2020 are very broad and deliberately vague. They prohibit sedition, subversion, collusion with foreign powers, and terrorism, but no clear definitions are provided for these activities. Since the law’s introduction, more than 180 individuals have been arrested for chanting protest slogans, clapping in court, and criticizing the government’s Covid response.

    Many citizens of Hong Kong have left the city. In our conversations and interviews with the people of Hong Kong, we often encountered an immense feeling of despair. They are afraid that they will no longer be able to live in the city, and that their home will cease to exist in the form to which they are accustomed. The pace at which people are leaving Hong Kong has increased recently, due to both national security legislation and, more recently, the draconian zero-Covid policy. As many as 300,000 people could turn their backs on the city in the next few years. In many areas of the world, there has been real growth in Hong Kong exile communities. There is hope that outside the city, Hong Kong life and Hong Kong’s distinctive culture will continue and thrive.

    With the continued suppression of civil liberties, the increasing persecution of government critics, and the general climate of fear, Hong Kong’s role as a city of innovation and creativity is in jeopardy. This is a huge problem for a city that based its existence on being not just an economic center of global significance, but also of free exchange and criticism. But it is equally a great loss for Mainland China, even if China does not want to admit it.

    Julia Haes is Managing Director of the China Institute for German Business in Munich and CEO of Finiens. Both companies advise Chinese and German companies. In the podcast “China ungeschminkt” she talks with Klaus Muehlhahn and Anja Blanke about China-related topics.

    Klaus Muehlhahn is a Professor of Sinology and President of Zeppelin University in Friedrichshafen, Germany. Previously, he served as Vice President of the Free University of Berlin. Muehlhahn is considered a leading expert on China, and in 2009 he was awarded the John King Fairbank Prize by the American Historical Association. Last year, Muehlhahn’s book “Making China Modern: From the Great Qing to XI Jinping ” was published in the “Historical Library of the Gerda Henkel Foundation”.

    Today, Monday, May 16th, their newest book “Hongkong: Umkämpfe Metropole. Von 1841 bis heute” (Hong Kong: A contested metropolis. From 1841 to present day), is released by Verlag Herder.

    • Civil Society
    • Hongkong
    • Human Rights
    • Regenschirm-Bewegung
    • Society

    Executive Moves

    Alexis Tsang and Philip Sun will jointly head Equities Sales in China at US investment bank Goldman Sachs. Tsang will also lead the bank’s hedge fund business along with Laurianne Curtil and Fred Grunberger.

    Tim Tu and Aaron Oh will head the financing division for the Asia-Pacific region at the major Swiss bank Credit Suisse. They will operate out of the Hong Kong office. Tu had only left his job as head of the Swiss bank’s Chinese securities joint venture in April.

    • credit suisse
    • Goldman Sachs

    Dessert

    What looks like the dusty imprint of a moth are actually the remains of creatures that roamed the Earth’s oceans around 485 million years ago: The trilobites documented in Zhenxiong in southwest China’s Yunnan Province are providing researchers with new insights into the extinct class of marine creatures. The discovery by scientists from Peking University, the Nanjing Institute of Geology and Paleontology of the Chinese Academy of Sciences and the Xi’an Geological Survey Center was recently published in the journal Palaeoworld.

    China.Table editorial office

    CHINA.TABLE EDITORIAL OFFICE

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