Masks and Rules Return to Shanghai Banks Preparing for the Worst
(Bloomberg) -- A year after becoming the world’s first major financial center to tame the virus, Shanghai is going back on high alert.
The fast-moving delta variant outbreak across China forced some global banks and local financial institutions to bring back the containment playbook. Shanghai’s more than 470,000 finance professionals, who have nearly all been back at work and mask-free since the middle of last year, now face regular temperature scans and checks to enable contact tracing. At some banks, people were told to put their masks back on in common areas and hosting visitors in conference rooms was prohibited again.
Among those shifting their stance is Fidelity International Ltd., which is again discouraging its Shanghai employees from non-essential travel and urging them to avoid large crowds. Some are preparing for the worst. Guotai Junan Securities Co. is drawing up contingency plans including rotating shifts to ensure continuous operations if necessary, according to a memo last week. Departments at the brokerage with vaccination rates below 90% are urged to get their staff inoculated.
In just three weeks, China’s local confirmed cases have grown to more than 1,000 across half the country, including Shanghai and the capital Beijing. While China has stuck to its regime of mass testing and targeted lockdowns that has crushed more than 30 previous flareups, the speed and scale of the latest outbreak risks disrupting businesses in the world’s second-largest economy at a time when growth projections are already being slashed.
Public transport and taxi services were curtailed in more than 200 of the worst-hit areas and at least 46 cities have advised people to refrain from traveling unless it’s absolutely necessary. Officials have curbed train service and subway usage in Beijing, which has reported nine local cases since July. Chinese authorities also urged people to cancel business trips and vacations, while some colleges around the country have asked students, especially those from high-risk areas, to delay their return to school for the new semester.
Shanghai, which houses stock, bond, currency, gold and other exchanges with annual transactions of 1,900 trillion yuan ($293 trillion), is home to 1,600 financial institutions, about of which 30% are from overseas, according to Xinhua News Agency.
At the city’s International Finance Center all tenants are being urged to make necessary arrangements for employees to work and dine while avoiding crowds, and stick to government health requirements. Anyone entering the building, whose occupants include HSBC Holdings Plc and Fidelity, must also wear masks and have their digital health codes greenlighted.
A tenant on the 21st and 23rd floors at the nearby Shanghai World Financial Center had all their staff tested after an employee was found to be a close contact of a confirmed case, the building management said in a notice last week, without identifying the firm. Mizuho Financial Group Inc. occupied both floors, according to its website. Mizuho declined to comment.
In Bejing, China Asset Management Co. tested all staff at its headquarters this week. It advised employees against leaving the city unless it’s on essential business, according to a current employee. Those returning from medium-and high-risk regions aren’t allowed back into its offices.
Shenzhen-based Ping An Insurance (Group) Co. has advised staff to wear masks and minimize in-person meetings in its offices, and prioritize online communication when possible. The company also in principle halted all business trips to medium-to high-risk regions.
The changes in Shanghai show the complexity of returning to normal even after the city’s initial success. Bankers around the world are facing the same uncertainty, with hubs like New York also struggling with how to act in the face of the more virulent delta variant.
In one corner, firms like JPMorgan Chase & Co. and Goldman Sachs Group Inc. are making clear their determination for staff to return to the office. Other banks, including Citigroup Inc., and a variety of European lenders, have sketched out more flexible policies.
Policies are now diverging more than ever. There was chaos last week at Wall Street banks as firms summoned employees back to their towers amid the spread of the variant. As the mutation shows its ability to jump between vaccinated people, executives are struggling with how to calibrate responses.
However, in China many financial institutions remained business as usual as they wait for more guidelines from the local authority. Some major state-owned banks including Bank of China Ltd. still require employees to come into office every day.
At UBS Group AG, there’s a flexible work arrangement system in place allowing employees to apply to work from home if needed. Restaurants in the Lujiazui financial district are still bustling and subway is crowded.
UBS said all its businesses continue to operate at full capacity under the flexible working arrangements. “We closely monitor the COVID-19 situation in China and strictly follow government’s guidance and the firm’s response protocols,” it said in a statement.
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