Jordan Lee, a restaurant owner in the Chinese city of Chengdu, is desperately hoping that the January New Year holidays will help him make up for lost income due to pandemic-related restrictions. Although the number of cases has skyrocketed since the central government lifted most of the pandemic control measures this month, Li believes people will still travel to Chengdu. However, there is one problem, and that is the lack of enough workers to meet the demand. Consequently, Lee prepares for the worst-case scenario where he runs his restaurant by himself because, in his words, “he can be the boss, the chef, the waiter, and handle finance at the same time.” Jordan Lee’s predicament highlights the challenges facing China’s essential services sector as it seeks to reemerge from the virus. Meanwhile, as the disease now spreads uncontrollably across the country, businessmen in the industry note that ongoing lockdowns have made it impossible for them to save money and expand their operations. They also have to deal with the fact that sick workers are on the rise due to Chinese New Year next month.

The conventional services sector, which accounted for 53.3% of China’s gross domestic product (GDP) in 2021, has been hardest hit by health restrictions.

A few days ago, Beijing reversed nearly all related measures that have rocked its $17 trillion economy. dollars. “The service sector in major cities is still experiencing a labor shortage and the loss in productivity is quite clear,” said Deng Wang, chief economist at Hang Seng Bank China. “This situation will not improve significantly until the Chinese New Year, and the recovery is not happening all at once, but by city.” On the spending side, retail sales, a key indicator of consumption, fell 5.9% in November compared to 2021, with the focus shifting to 8.4%.

Politicians have drawn up plans to revive consumption and investment. However, the impact of the economic downturn on unemployment and wages is expected to limit spending on services in the near future.