More U.S. Companies In China Cut Forecasts, Scale Back Investments As Covid Persists

While Shanghai authorities have announced whitelists that allow just under 2,000 businesses to resume production, AmCham’s latest survey found that among respondents with Shanghai operations, 15% said they had yet to reopen.

That doesn’t mean the majority are fully back at work. Hart said anecdotally, some companies he spoke with last week in Shanghai were operating at 30% to 50% capacity. Many suppliers remain closed, while shipping parts and goods to customers is still challenging, he said.

Several different cities across China have enacted some form of lockdown, and truck drivers often need special passes and frequent negative virus tests in order to transport goods. Part of the difficulty is inconsistent implementation across provinces and cities of what China calls its “dynamic zero-Covid” policy, Hart said.

At the local level, “government officials are looking for practical ways for companies to solve their issues and get back to work, because those people are judged by economic performance,” Hart said. “When we talk to government at [a] high level, it’s not a focus on the economy. It’s a focus on health and Covid reduction.”

“Just based on our own companies’ experience in the U.S. and Europe and other markets, we have seen that other countries have taken a different strategy,” he said. “We’re just asking for a bit more of a balance.”

Last week, Chinese President Xi Jinping led a meeting that emphasized the country should “resolutely fight” against all questioning of virus control policies. The meeting also warned of economic consequences if China didn’t stick to its dynamic zero-Covid policy.

In November, China’s Center for Disease Control and Prevention published a study that warned that shifting to the “coexistence” strategy of other countries would likely result in hundreds of thousands of daily cases — devastating the national medical system.

For Monday, mainland China reported 349 new Covid cases with symptoms and 3,077 without symptoms, mostly in Shanghai — which reported six deaths for the day.
























































Source: CNBC
Image Source: Pixabay