Lights Out: COVID-19 and the Businesses of Chinatown

Courtesy of Culture Trip

By Katie Leung

Maybe it’s the dim sum or maybe it’s the hustle and bustle that dominates the streets as locals carry home their grocery bargains from the lively markets – the atmosphere of Chinatown is undeniable. Yet today, the life that once existed in the Chinatown community has been swiftly extinguished by the tightening reins of the pandemic. The Chinatown community has been disproportionately impacted by the pandemic, evidenced in early June when 63% of New York City’s restaurants reopened relative to the mere 46% reopened in Chinatown. 

One central reason for this unequal impact on Chinatown compared to other New York City businesses is that the former have been struggling to acquire additional funding necessary to support operations. Many Chinatown businesses are minority-owned micro-businesses that were rejected from government loan support as an indirect result of language barriers. Formed by an influx of Chinese immigrants in the nineteenth century, Chinatown remains run by many small-business owners who face difficulties with English. Though presumably improved since then, the 2000 New York City census indicated that a high 48.7% of the Chinatown population struggled with English. The persistence of this challenge resulted in costly delays with respect to petitions for additional funding; by the time that the respective paperwork was prepared, the extent of available funding had been dramatically reduced. New York Assembly-member, Yuh-Line Niou, also recognizes this linguistic issue. “Folks don’t realize, we have so many different languages being spoken in Chinatown, and it’s important that we provide services that are accessible to everyone.” In addition, loopholes in the Paycheck Protection Program enabled hotel and restaurant chains with smaller individual locations to procure significant chunks of funding early on, leaving swaths of small business owners stranded without cash inflow. 

Chinatown businesses rely heavily on local as well as tourist foot traffic to provide a steady stream of income. Louise Palmer, a PR professional affiliated with Chinatown-focused support organizations, commented that “long term foot traffic is the best, and pretty much only sustainable way to keep these businesses open in the future”. Most small businesses have less than three months of cash in their reserves to sustain operations. From paying for rent and employee expenses, Chinatown businesses were quickly exhausted when their normal methods of cash generation were cut. The concentration of small businesses in the Chinatown community only further amplified the impact on minority entrepreneurs. In September, the City Council of New York passed regulation that allowed dine-in restaurants to tack on up to an additional 10% charge to customers’ orders, a policy intended to support struggling local businesses. However, businesses in Chinatown were again disadvantaged given the historically thin profit margins they have operated on. Restaurant owners have largely opted to eschew these surcharges in order to attract customers looking for cheap meals during the pandemic; for many of these businesses, an additional surcharge could undermine their business model, greatly failing to serve as a buffer and instead reducing demand. With no online presence, Chinatown businesses largely suffer from limited exposure to new customers as they have traditionally thrived on local presence and customer awareness from foot traffic. Stunted revenues have also left many businesses stuck in temporary closure limbo with many concluding in permanent closures. Sales had dropped as much as 85% for some as early as by March 16th, which marked the official ignition of the swift decline faced by many of these local cafes and restaurants when operations were beginning to be restricted to take-out and delivery services.

Culture has played a significant role in the severe decline that many Chinese-run mom-and-pop shops are facing as well. Within Chinese culture, asking for help has been stigmatized amongst traditionally minded immigrants who insist on building their business from the ground up independently. While nonprofits offered assistance at the onset of the pandemic, they were met with skepticism and reluctance from business owners, which complicated support efforts. In stark contrast to the willingness of American businesses to willfully accept additional funding, Chinese culture espouses a fiercely independent resistance to external assistance, one which may exacerbate declining profits and store closures. 

Though beloved shops in Chinatown are facing more struggles than other neighborhoods, a multitude of volunteers have banded together to revive the community. Send Chinatown Love, a non-profit formed during COVID, has organized a highly successful food crawl to promote businesses that lack a digital presence. On the funding side, Welcome to Chinatown was able to raise $245,000 for the vulnerable businesses within the community and the Chinatown Partnership can be credited for building outdoor dining that boosted top and bottom line for shops. 

Help isn’t limited to organizations though. The next time you want to order food from Chinatown, consider picking it up in person so that restaurants can save paying deliverers markups from your order. Instead of whipping out your credit card, pay for your order in cash so businesses can take home the portion of fees that are normally given to credit card companies. There are plenty of ways in which you can empower this vibrant, culturally rich neighborhood to sustain itself through the difficulties of the pandemic. However, without a strong and focused approach to lifting these businesses out of such complex and unique problems, the iconic storefronts of Chinatown may only be able live on in New Yorkers’ fond memories.

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