75% of European companies in China affected by zero Covid policy

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The European Union Chamber of Commerce said on Wednesday that China’s strict coronavirus policy and related inconsistency is having a negative impact on three-quarters of European companies in the country.

China is the latest major economic nation to pursue a strict health strategy in the face of the Covid pandemic, from quarantining those who test positive and in targeted areas to mandatory PCR tests for entire regions.

But this policy has dangerous consequences for the economy, as many businesses close, tourism is paralyzed, factories are put on hold and production chains are disrupted.

As a result, Covid measures and “uncertainty” are fueling concerns for European companies in China, according to an annual survey conducted by the European Union Chamber of Commerce in Beijing.

“As long as the threat of lockdowns persists, the business environment there will remain unpredictable,” the Chamber of Commerce wrote, noting that “inflexible and inconsistent” zero-Covid policies are leading 23% of European companies surveyed to consider investing outside of China. The survey showed that this percentage is at its highest level in 10 years.

China has great growth potential and an unparalleled industrial chain, but “the commitment of European companies cannot be taken for granted,” according to the European Chamber of Commerce.

Since 2020, the country’s borders have been almost completely closed, which seriously hinders social interaction with the outside world, as well as family reunification. The Chamber of Commerce warned that “if China continues on this path, the business environment will become increasingly difficult” and this will accelerate the “migration” of European citizens.

In June, China reduced the mandatory quarantine period for travelers arriving in the country from 21 days to 10 days. But the low number of flights with China and the exorbitant price of tickets remain a major barrier to travel.

The “zero-covid” strategy championed by Chinese President Xi Jinping is coming under increasing criticism from the business community, concerned about the threats posed by lockdowns to economic activity. “At the moment, ideology prevails over economics,” the European Chamber of Commerce wrote with regret.

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