Two surveys were conducted in April to examine China’s lockdown on foreign businesses. Both released the results on May 5.
The first one is from the Shanghai Japanese Commerce and Industry Club.
The findings show that 54 Japanese manufacturers in Shanghai responded to a survey. 63% of these firms are still under shutdown. Over three-quarters of those who have resumed production said their facility utilization was at or below 30% of the normal level.
91% of enterprises are suffering a significant impact.
The biggest factor that disrupts their operations is the logistics networks. 56% of respondents say they cannot arrange any logistical distribution inside the financial hub.
Transport authorities have issued transit permits, but a limited number of companies have been granted. These measures aim to control the Covid-19 epidemic but turn out to restrict factories from getting raw materials and components as well as shipping finished products.
Nikkei Asia reported a representative at a Japanese-owned firm saying, “A full-scale operational restart is impossible realistically.”
Together with Roland Berger, the European Chamber released the second survey of European business in China.
Three-quarters of companies said China’s strict Covid-19 control measures have hurt their operations. Most serious sectors are seen in logistics, and business transportation, with more than 94% of firms saying so.
78% reckon that China is a less appealing investment location due to its draconian Covid-19 restrictions, while one-third of respondents attribute the Russia-Ukraine war to the Chinese market’s less attractiveness.
Denis Depoux, global managing director of Roland Berger, said that China’s Covid-19 policies and Ukraine’s crisis prevents European companies from making sound business decisions.
He added, quote “A clearer crisis exit strategy would help maintain confidence in a European business community still highly committed to Chinese markets.” end quote