The metropolis of Shanghai, which is home to many foreign companies, went into two-part lockdown this week as municipal authorities tried to contain an outbreak in China’s worst Covid wave in two years.
Hector Retamal | Afp | Getty Images
BEIJING — China’s worst Covid wave since the pandemic’s initial shock has fueled annual revenue forecasts for about half of the country’s U.S. companies, a survey found Friday.
The Beijing-based US Chamber of Commerce in China and its counterpart in Shanghai polled 167 members operating in China last Tuesday and Wednesday, including 76 manufacturers.
The metropolis of Shanghai, which is home to many foreign companies, went into two-part lockdown this week as municipal authorities tried to control a growing number of Covid cases. Those measures followed shorter lockdowns in Shenzhen’s tech center, Dongguan manufacturing center and travel restrictions across the country.
The survey found that 54% of respondents have lowered their 2022 revenue forecasts for the year as a result of the latest Covid-19 outbreak.
More than 80% of manufacturers reported delayed or reduced production, as well as supply chain disruptions.
Nearly all, or 99%, of respondents said the latest outbreak had affected them.
Since the pandemic began in 2020 and China tightened restrictions on international travel, foreign companies in China have complained about lengthy quarantine requirements on arrival and difficulties in bringing in senior management or technical personnel.
If China’s current Covid-19 restrictions remain in place over the next year, half of respondents to this week’s AmCham survey said they would cut investment. Nearly 75% of respondents said maintaining these restrictions would reduce their revenues and profits.
And nearly 20% of manufacturers said they would relocate production or operations outside of mainland China if Covid-19 restrictions remained.
While about half of respondents were generally satisfied with China’s efforts to contain the spread of Covid, the three main aspects of dissatisfaction were the length of the required quarantines, restrictions on travel to China and the lack of flights to China.
The survey respondents’ top three recommendations were to allow home quarantine or other options, simplify entry requirements to China, and allow more flights to the country.
The number of new Covid cases and reported deaths in mainland China remains well below that of major countries.