A growing number of American and Western companies are considering moving their investment out of the world’s second-biggest economy due to its strict Covid approach. They are urging Beijing to adjust the policy.
CNN reported, that under the government’s Zero covid strategy, at least 31 cities are under full or partial lockdown. This has damaged the whole economy including the foreign sectors.
According to a late-April flash survey published last week by the EU Chamber of Commerce in China, around 85 out of 372 European businesses were thinking about shifting out of China, the highest level in a decade. Around 78% said China was now less attractive for investment because of its Covid policies.
American Chamber of Commerce in China also published another survey showing 50% of American businesses have either delayed or decreased investments in China. Nearly half said that foreign workers are either significantly less likely or refuse to relocate to China.
The country’s services sector activity sinks to the lowest level in two years. Foreign investors are calling for a new government’s covid approach.
Colm Rafferty, chairman of the U.S Chamber of Commerce in China said, “We understand China choosing to prioritize health and safety above all else, but the current measures are throttling US business confidence in China,” and that, “Our member companies urge the government to achieve a more optimal balance between pandemic prevention, economic development, and opening-up of the country,”
Joerg Wuttke, president of the EU Chamber of Commerce in China also said, “Zero tolerance doesn’t work because the world has learned to live with Covid and China has to change strategy,”. He added, “We are trying to tell the Chinese government that if you don’t change, we will vote with our feet.”
Economists have warned that lockdown measures could cause even more severe disruption than was suffered during the initial outbreak in Wuhan.