For clues on how the Covid-19 pandemic ends, look at China where society is normalising and business is getting back on track. As the World Health Organisation reports about 735,000 confirmed cases of the deadly coronavirus and about 34,000 deaths at last count around the world, the country where it all started is showing signs that the speed at which the disease is spreading is slowing. South African actuary Alain Peddle, Deputy CEO of Ping An Health, a China-based health insurer owned by South Africa’s Discovery group, spoke to BizNews editor-in-chief Alec Hogg from Shanghai about what it is like living through lockdown. He says that, in China, the light at the end of the dark Covid-19 tunnel can be seen. There are still social controls, for example regular temperature checks at building entry points. But the extreme part of the containment lasted from about 23 January to 10 February. So, in just over three weeks, China re-started its economy. – Jackie Cameron
Alain Peddle, who’s the deputy CEO of Ping An Health joins us now from China.
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Alain, we were just talking about issues here in the South African economy where the lockdown has just started. Being based in China you’ve seen this happening for quite some time now. When did you first at Ping An get to an understanding of what was going on with Covid-19.
So we started seeing signs in the third last week of January. I left the office on January 21 in order to join the Chinese New Year celebrations. That was about the date we were starting to get masks issued, and about three days later, everything went into lockdown in Wuhan and other places, right in the middle of the Chinese New Year which is a massive event – a week-long holiday where Chinese people traditionally travel across the country to return to their hometowns.
And where about are you based?
I am based in Shanghai, I’ve been here for about four and a half years. To your point the Covid-19 situation started at around Jan 20, but what’s quite interesting and I’m sure many of your listeners might be interested to know, that on February 10 we started bringing people back into the office. All-in-all, it was about a three-and-a-half week lockdown but in fact it’s about five weeks to get things back to a state of some normality.
Are you there now?
Yes, I left South Africa and came back to China on February the 15th and I’ve been in the office since. My family returned about two weeks ago. One thing that I really need to say is that there is definitely light at the other side of the tunnel. Things are definitely not back to normal in Shanghai but it is functioning, society’s functioning. We are still doing tentative checks in the building, people are all wearing masks and you still have to show your QR code as you go into restaurants or into public transport to prove that you’ve been in Shanghai for 14 days, but we are interacting again.
You are there as the deputy CEO of a massive business that Discovery owns 25% of. You obviously are South African, as I can hear from your accent. Do you think that the way the Chinese have handled it could be applicable in South Africa?Â
Yeah. The home quarantine, the track and trace, the shutdown, I think are absolutely applicable. Some of the things the Chinese have done spectacularly well have been right down at the local organising level, right down the suburb level they have officials and volunteers monitoring sections of suburbs where they’re monitoring people coming in and out. That’s a very important step. By the time South Africa moves into the stage of people moving around again – so some sort of controlled reintegration. I think that their technique is applicable elsewhere, the organising capabilities of the Chinese have truly been astonishing.
The other things that they have done, which is interesting, was that they involved private companies in a way which many other countries can aspire to. For example we’ve been very engaged in helping coordinate purchases of local produce from the district community and sending those food supplies to Wuhan. As a private company we are able to support the efforts of governments on both sides of the financial equation that are helping stimulate demand and keeping the rural community in business and at the same time addressing the challenges that are facing Wuhan as one of the cities of over 10 million people in lockdown.
Listening to the interim results presentation where there was a question about Ping An’s exposure to Covid-19, of course at that stage it hadn’t really hit the rest of the world. The response was that the government is actually picking up the tab. How does that work?
China has a social health insurance program which covers basically 99% of the citizens. Every Chinese person has access to health care and most people make use of it. Certainly the idea is that the best doctor in the triple A hospitals which is all government run, and we’ve got the advantage of being able to give reasonably good care at a good price. The downside of it is long waiting times, hospitals aren’t necessarily the most pleasant environments for people to be in. What we provide is cover is effectively a form of top-up. In the context of our business the government has taken the responsibility of paying for essential health care and all treatment related to Covid-19 will be covered by the social health insurance programs. What we can do as an insurance company is that we can help facilitate upfront funds for individuals who don’t have money at the point when they go the hospital and they need to pay some form of admission fee which they can still get back from the government but they may not have the cash flow, so we help them with that. There are certain forms of after-diagnostic treatments where they may have to go back for visits which may not be fully covered by the government. We also provide maybe very thin levels of death benefits for some of our customers, but that’s not standard in our policy. By large the government system that funds treatment.
How is the progress going from the Chinese scientists perspective on finding cures or vaccines or at least some kind of assistance to fighting Covid-19 on a clinical basis?
I’m not a clinical expert and certainly it’s tricky to keep up to date with all the research that’s been done, but there are several tests being conducted, often with very large samples, working very hard at finding some form of vaccine or immunisation. There’s been no declarations of success as yet. The language we see is ‘promising trials’ and certainly there’s quite a lot on the news about the work progressing rapidly. Certainly nothing that makes me think we’re on the cusp of success.
If you take the level of commercial activity – you’ve been back at the office as you said and other colleagues as well – from Shanghai being pre-Covid-19 at a level of 100, where would it be right now?
I would say a city like Shanghai is probably at around 80. I think there are other more industrial cities, where things are certainly not at that level, so definitely heavy manufacturing. There’s all kinds of issues. There’s still some transport restrictions across the country that people still in their hometown may find it difficult to get back to the factory. The factories themselves went to a period of being unable to produce anything and are now going through a period of uncertain demand. There are certainly challenges there. In other industries, specifically the restaurant services environment, small businesses that do hairdressing and those types of businesses are still finding it tough. Things that cannot be transacted online are having the toughest time. The online businesses have gone through an enormous growth phase. The Chinese economy is extraordinarily online, in a city like Shanghai the 20- to 30-year-olds pretty much only transact online. They don’t have a credit card, they never use cash, they buy everything through their phones and laptops. And so the infrastructure is set up around that and what this epidemic, the shutdown, has done has moved some of the landloads onto these systems as well.
Could you give us a time span? Obviously, sitting where we are in South Africa we’re trying to work out how long it will be before we can get to the place that you’re at now in China.
So, I said that January 20, January 21 was when this first started to mask the issue. Lockdown happened about January the 23rd and then February the 10th certain businesses started going back to work. So that’s three weeks. It seems like a very long time. We started going back to the office where we had 20% of our staff in the office on a given day. Everyone basically worked one day a week and then we upped that week by week 20%, 50%, 60% etc. for another five weeks after that. After eight weeks, we’re at a point where people in the office but meetings were heavily restricted. Everyone wears masks and temperature scanned on the way in on the way out. And it’s taken another three to four weeks to feel somewhat normal. Even today if we have a meeting people will be wearing masks as a general rule and precaution, and not stand close to one another. Generally speaking most business travel is off although that also started to come back to life to maybe this week.
So our three-week lockdown if we overlay that to the Chinese experience would then take us to mid-April. Thereafter it’s still going to take maybe eight weeks to get to the point that you’re at now.Â
I think so. And that’s of course making some heroic assumptions around all the other variables. How comprehensive the shutdown was implemented and the way in which the controls and the kind of human behaviour played out in the period after that. So I think, it’s difficult to map these experiences from one place to another directly. My Chinese colleagues would certainly applaud the decision being taking in South Africa at the moment. Many of my colleagues are absolutely terrified that other parts of the world just didn’t pay enough attention early on in the epidemic.
Alain Peddle is the deputy CEO of Ping An. There you go David, you’ve got it from the horse’s mouth, exactly what the likely direction is for South Africa.
What’s interesting is that for us it seems like such a long time and yet when you reflect back on, January 20 by February 10 we already turned back, that is only a couple of weeks. The bright side is it’s going to pass, it will be better within a couple of months – not years. We do need the discipline. You can’t really map this out, and how are we going to respond. We’ve got to maintain discipline, but it’s encouraging.
He is also far too polite in saying ‘other countries’, the way things are going in the US is just extraordinaryÂ
The way things are going in New York particularly, where everybody’s so close on top of each other. My daughter’s there and we talk to her every day. They are taking it in their stride. It’s hardest on teenagers and kids. They are home schooling at the moment they’re getting lessons, but for a 10-year-old, 12- or 13-year-old it’s particularly demanding because they haven’t got the same sitting power and patience that we have but they have to do it. That’s where it can explode. They have opened up new hospitals, there are plenty of beds and they made a lot of provision, but it’s still very scary in the big cities.
