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Any circumstance hitting a limit will begin to change. Change will in turn lead to an unimpeded state, and then lead to continuity.
–– I Ching
The Chinese word for crisis, weiji, appears to bear two opposite but complementary meanings: danger and opportunity. The worldwide outbreak of the COVID-19 pandemic has largely frozen the Chinese economy and undermined investors’ confidence, leading to hardship for many businesses. On January 29, 2020, shortly after the Wuhan shutdown, the General Office of the State Council of China issued an urgent notice regarding the resumption of operations, which encouraged Chinese companies to produce key anti-epidemic supplies such as masks and medical devices. Some ‘lucky’ ones – e.g., companies in the pharmaceutical industry or in relevant anti-epidemic businesses – could, thus, take advantage of the opportunity side of weiji. However, what's remarkable is that thousands of Chinese companies, since the beginning of 2020, have proactively adjusted their businesses or transformed their production to anti-epidemic supplies. Though hit by the crisis, these companies have managed to turn the threat of an unexpected, disruptive event into renewal opportunities by demonstrating the organizational resilience needed to survive and recover from the crisis (Ortiz-De-Mandojana & Bansal, 2016; Rao & Greve, 2018; Vogus & Sutcliffe, 2007). Note, also, that among the resilient companies, some have exhibited drastic changes in the scope of their businesses, while others have engaged in relatively moderate shifts. Responding to the crisis in a more moderate manner is in line with the Chinese philosophy of zhongyong, which suggests that one should balance opposing forces and avoid going to extremes in all situations, perhaps more so in the context of crisis (Li, Leung, Chen, & Luo, 2012; Zhou, Li, Zhou, & Prashantham, 2019). In this commentary, we explore the following questions: What are the characteristics of these resilient companies? Have they performed better during the COVID-19 crisis? Has a strategy of moderation helped companies to seize opportunities presented by the crisis?
To identify the resilient organizations, we investigate all companies listed in the Chinese equity market with businesses involving masks, medical devices, thermometers, disinfectants, and medical protective clothing. We identify 2,195 companies from the TianYanCha database (www.tianyancha.com), 314 of which are listed on the A-share stock market.[1]...