A February 27, 2020 report (available for free download below) from Mainland China sheds some light on the impact of the coronavirus on the country’s language industry. As the crisis ripples across the globe, the findings could prove interesting for language service providers (LSPs) in other parts of the world, given that China’s response to the outbreak is about five to six weeks ahead of other countries’.
The report was led by Professor Wang Lifei from Beijing Language and Cultural University with the help of the university’s School of Translation and Interpreting and Institute of International Language Services, as well as the Institute of Language Services at Hebei Normal University for Nationalities.
Professor Wang and collaborators analyzed responses from 113 LSPs, collected from February 23–25, 2020, about their experiences since the outbreak, which began toward the end of 2019.
Fragmentation and Fund Shortages
Professor Wang told Slator that the situation is serious for many LSPs in China.
As in other countries, China’s language industry is fragmented, with many small and medium enterprises (SMEs) making up a large share of the market. (In keeping with the overall composition of China’s language industry, 68% of LSP respondents to Wang’s survey had fewer than 100 employees; one-third had fewer than 20 employees.)
Slator 2021 Language Industry Market Report
Eighty-nine of the 113 respondents were private companies, compared to just eight state-owned enterprises and 14 joint-stock companies. Ninety-eight percent of companies in the industry have a registered capital of less than USD 1.44m (CNY 10m).
According to the survey, over 90% of companies had resumed work through some form of telecommuting, thanks to the fact that the daily operations of many LSPs can be conducted via cloud-based translation productivity (CAT) platforms and online business management systems.
Location played a major role in the decision to return to work. Less than 5% of the respondents who reported all staff as being back in the office are located in provinces “with good control of and less impact from the coronavirus disease.”
Although a total of 76% of respondents expected to return to the office between late February and early March, nearly 8% of respondents stated that they would go back when the disease is “over,” due to a combination of strict epidemic control measures in certain regions, concern for the safety and health of workers, and contracted market demand.
Steady Supply, Diminished Demand
The spread of the coronavirus has had a ripple effect on economies around the world, and LSPs in China have found it has affected both domestic and international clients.
Nearly 80% of survey participants worried about a decline in performance this year due to the epidemic. About 30% of LSPs expect a fall of 10%; almost 31% project a slip of 20–30%; and nearly 17% forecast a dive of over 50%.
Business related to on-site interpreting and translation has suffered a severe blow from measures intended to control the spread of the coronavirus, including the isolation and lockdowns of cities.
Slator 2020 Language Industry M&A and Funding Report
Similarly, services related to English were struck particularly hard by the coronavirus compared to other languages. This can be explained in part by the restrictions imposed by anglophone countries like the United States and Australia, such as the withdrawal of nationals and the suspension of flights and visa issuances. The impact of these restrictions is widespread, considering that more than 90% of Chinese LSPs provide English-language services.
In an industry that depends on freelancers who work remotely, it makes sense that LSPs, compared to companies in other industries, have generally not been hit by labor shortages, as freelancers can still carry out assignments from home.
For all the challenges and uncertainty the coronavirus has brought to China’s language industry, Professor Wang ends the report on a proactive and positive note, suggesting that LSPs seize the moment to reevaluate their business models and explore new opportunities.
The professor also recommends that LSPs in less affected regions resume work as early as possible to prevent “secondary disasters” like closures and layoffs; adding that support from these smaller LSPs will enable larger companies to get up and running sooner.
At the same time, Professor Wang said, the government should offset the financial burden on SMEs by applying more flexible and targeted measures, “including tax and fees cut, financing support, as well as rent subsidies or reduction.”
Hat tip to Alexander Drechsel (Conference Interpreter and Co-host of the Troublesome Terps podcast for alerting us to this report).
Image: Beijing Language and Cultural University, Main Building
Survey on the Impact of COVID-19 on LSPs in China
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