China’s Covid-19 policies and Russia’s invasion of Ukraine “are creating severe challenges to European business operations,” according to the results of a membership survey announced Thursday by the European Chamber in partnership with Roland Berger in China.
“As a result of China’s Covid-19 policy, 23% of respondents are now considering shifting current or planned investments out of China to other markets—more than double the number that were considering doing so at the beginning of 2022, and the highest proportion in a decade—and 7% are considering the same due to the war in Ukraine,” the European Chamber said in a statement.
“The introduction of more stringent Covid-19 containment measures in 2022, with China imposing full or partial lockdowns in at least 45 cities, is causing massive uncertainty for businesses,” the statement said. Three quarters of respondents said the measures have negatively impacted their operations, most acutely on logistics/warehousing, business travel and the ability to conduct face-to-face meetings, which have had a negative impact for 94%, 97% and 94% of respondents respectively, according to the chamber.
“Supply chains have taken a pounding, both upstream and downstream, with 92% of companies being impacted by measures such as China’s recent port closures, the decrease in road freight and spiraling sea freight costs,” the statement noted.
American Chamber of Commerce in China President Michael Hart in an interview last month also expressed frustration with uncertainties facing members in connection with China’s Covid policies (see post here).
The European Chamber has more than 1,700 members in nine cities: Beijing, Nanjing, Shanghai, Shenyang, Guangzhou, Shenzhen, Chengdu, Chongqing and Tianjin. Members include BNP Paribas, BASF, Ikea, Maersk, and Lufthansa.
Click here for the European Chamber statement and report.
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