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American Businesses in China’s – Impact of COVID Lockdowns

China’s worst Covid wave after the initial shock of the pandemic cut annual revenue forecasts for about half of American businesses in the country. Beijing-based American Chamber of Commerce in China; Its counterpart in Shanghai, also surveyed 167 members operating in the country, Including 76 manufacturers.

The Shanghai metropolis, where many foreign businesses are located, went into a two-part closure this week. Municipal authorities tried to control the number of COVID cases. A brief lockdown followed these measures in the Shenzhen technical hub, Dongguan manufacturing hub, and travel restrictions across the country.

The survey showed that 54% of respondents had reduced their 2022 revenue forecast due to the recent COVID-19 spread. More than 80% of manufacturers reported slowed or reduced production and supply chain delays. Almost all of the respondents said that the recent epidemic had affected them.

COVID-19 Influence on Businesses in China

COVID’s impact on business in Asia has been reflected since the pandemic began in 2020. China tightened restrictions on international travel. In addition, foreign companies complain of lengthy quarantine requirements upon arrival and difficulties in bringing in senior management or technical staff.

If the country’s current COVID-19 restrictions remain next year, the investment will decline. Nearly 75% of respondents said that maintaining these restrictions would reduce their income and profits. Almost 20% of manufacturers said they would shift production or operations from mainland China if COVID-19 restrictions remained.

Although only half of the respondents were satisfied with China’s efforts to control the spread of Covid, The three main aspects of dissatisfaction were travel restrictions in China, the required quarantine duration, and the lack of flights to China. The three recommendations of the respondents were to allow house quarantine or other options, simplify arrival requirements in China, and make more flights to the country. It is worth noting that the number of new Covid cases and deaths reported in mainland China is much lower than in other countries.

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