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Coronavirus crisis claims almost one in three Chinese businesses

Wok La Paz is one of the businesses that has closed.
Wok La Paz is one of the businesses that has closed. / FRANCIS SILVA
  • Restaurants, which have faced numerous Covid control restrictions, have been particularly badly hit

The coronavirus crisis has taken it toll on everyone. And the decrease in sales and the increase in costs has also hit many of the Chinese businesses in Malaga province. Since the pandemic began it is estimated that about 30 per cent of them have been forced to lower their shutters.

The president of the Association of Chinese Entrepreneurs of Andalucía, Leticia Chen, revealed that the crisis has especially affected businesses located in Malaga’s districts, since families in those neighbourhoods have lost more spending power compared to the city centre or the area to the east of the provincial capital.

Restaurant businesses, which have had to face numerous coronavirus restrictions, especially in terms of opening hours and capacity, have been especially hard hit. Chen acknowledges that they have had a particularly bad time until the first quarter of this year, although in recent months the situation has begun to improve somewhat.

Good business nose

"The Chinese have a very good business nose and know how to find business opportunities, so many of the stores that have closed are reopening with another type of activity," she says.

Although there is no official data, some 7,000 Chinese families are estimated to live in the eastern business area province.

About 260 wholesale stores are concentrated on the industrial estates alone. This group is also having a hard time due to the increase in the price of exports. Leticia Chen explains that the price of containers has skyrocketed and that now you have to pay $9,000 for a 20-foot container that cost 1,200 before the pandemic.

"The problem is that all the containers are now in the destination countries because everyone has ordered products from China and now it is very difficult to find one at the point of origin," she claims.

The change in shopping habits has also been a hard blow for Chinese business people working in Malaga. The pandemic has seen a boom in the number of sales on the internet sales and, therefore, hit all traditional commerce.

High costs and small margins

Regarding the current situation that the Chinese community is experiencing, the businesswoman predicts that sales will recover gradually over the next few months. She expects that many businesses will bit be in profits again until at least next summer, since costs – including electricity and taxes - have also increased a lot.

"The costs are very high and the margins very small, so many businesses have been forced to close," she acknowledges.