ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Coronavirus

China punishes price gougers as nerves fray over shortages

Cities put bankrupt companies back in business to make protective gear

A man in a face mask shops at a supermarket in Beijing. The Chinese government wants to prevent any shortages or price spikes that could trigger public panic.   © Reuters

SHANGHAI -- China is nervously monitoring supplies and prices of food and other daily necessities, as people return to cities from the extended Lunar New Year holiday amid the coronavirus outbreak that has strained the nation's logistics network.

The central and other governments are taking a range of measures, from fining supermarkets for raising prices to reviving defunct companies to boost supplies of protective gear. But greater economic activity risks further spreading the virus, placing Beijing in a difficult position.

In an attempt to keep residents calm, Wuhan Commerce Bureau Deputy Director Yi Renchuan has shared information on social media on stores that have kept their doors open and prices steady. He posted Saturday about the delivery of tens of tons of merchandise to one supermarket.

The National Development and Reform Commission, which steers China's economic policies, has instructed large northern cities to supplement their supplies of vegetables as necessary if stock at local stores appear to be running low. It is sending more supplies to locked-down Wuhan, including 600 tons of vegetables a day from the city of Shouguang.

Grocery prices seem to be on the rise in Shanghai as well, with a luxury supermarket selling broccoli for 20 yuan, or $2.85, per head Sunday. But food prices usually increase around the Lunar New Year holiday, and stock seemed to be plentiful apart from certain frozen foods and processed meats.

"This is within the acceptable range," a 40-something shopper said.

Meanwhile, Shanghai recently fined French supermarket chain Carrefour 2 million yuan ($286,000) for jacking up prices on certain vegetables and failing to correct them after receiving a warning from the city.

Sellers of medical masks, which are in short supply across China, have also been penalized for raising prices.

The Lunar New Year holiday had been extended to this past Sunday in an attempt to slow the spread of the virus, and businesses in such areas as Shanghai and Beijing have been told to keep their doors closed another week. But laborers who had returned to their hometowns for the holiday are starting to head back to the cities where they work, possibly carrying the virus. The cities will see greater demand for food and other daily necessities.

There has been a shortage in particular of masks and other protective gear. Shanghai has told manufacturers to churn them out around the clock, but they struggle to keep up with demand.

"There are hardly any masks for sale, so I just stay at home," said one person who was visiting family in Wuhan.

For protective gear, business operations are being brought back from the dead. The Shandong Province city of Weihai invested 3 million yuan in Weihai Hongyu Nonwoven Fabric Products, ordering the medical accessories maker to fully resume production. It is expected to have the capacity to make 70,000 masks and protective suits a day.

Suzhou, in Jiangsu Province, is working with lenders to a manufacturer that went out of business in 2018 so that it can resume operations.

Still, there are snags. A poultry growers' association in Hubei Province says certain members are running short on feed. The authorities face a growing challenge in balancing the need to ramp up production and distribution and containing the outbreak.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media