China’s COVID rules batter business confidence: EU Chamber
China's strict zero-COVID policy has led to a plunge in confidence among European companies operating in the country as supply chains are tangled, revenue projections fall and staff leave, according to a business group survey.
The streets of Beijing's business district were deserted yestersay as the government called for people to return to work remotely, with scores of subway stations shut after a national holiday muted by coronavirus curbs.
Beijing remains wedded to its strategy of stamping out coronavirus clusters with targeted lockdowns and mass testing, even as the fast-spreading Omicron variant makes this increasingly difficult.
But the European Chamber of Commerce said in a report that the strict containment measures in dozens of Chinese cities, including the biggest Shanghai, had caused "disruption on an epic scale".
"While the war (in Ukraine) has had an impact on European businesses operating in China, Covid-19 presents a far more immediate challenge and has caused a considerable drop in business confidence," the Chamber added.
Its survey of more than 370 members was conducted in late April.
Nearly a quarter of respondents are now considering moving current or planned investments in China to other markets -- more than doubling from two months ago.
Almost 60 percent of respondents decreased their revenue projections for this year, while around a third saw a drop in staffing, results showed.
Most companies also reported a negative hit on supply chains, with struggles accessing raw materials and components, or to deliver finished products.
COVID-19, EU, Economy,