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April 20, 2020 | Brief
Mobility constraints pose business challenges that could be long lasting. China’s COVID-19 response has seen the imposition of vast local controls on mobility, essentially immobilizing hundreds of millions of people with a combination of digital tracking technology and historic methods of physical mobility control. The crisis response to basically stop commerce and mobility down to the neighborhood level effectively thrust power back into the hands of the locales and reignited the entropic forces for local autonomy. There is high plausibility that the China operating environment, post COVID-19 crisis, will see intracity mobility become more controlled and city economies become more autonomous, possibly for a prolonged period. This is likely to produce a quagmire of differing local regulations regarding business restart, business conduct, transportation, and mobility that will require renewed attention to local government relationships.
On the digital side, there has been a massive acceleration in the development and implementation of “Social Credit”-type apps at the local level for mobility control, together with the advancement of its enabling technologies and mass acceptance of its use. In this area, we have arguably witnessed a ±5-year step-change occur in just a few months. This advance of the state into the public sphere is not likely to reverse. Whether digital monitoring will be used progressively to enhance public trust and ethical commerce, or coercively to influence social norms and consumer behavior in favor of vested interests remains to be seen.
Adherence to mobility constraints will drag on economic restart. While, in normal times, scorecards for local government officials in China would focus on economic performance, the situation now is that the risks of missteps with virus control measures far out
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