Over half of U.S – invested companies in China lower their revenue projection as found by a survey released on Friday, April 1, by the American Chambers of Commerce in Shanghai and Beijing (AmCham). The result has provided a glimpse of the economic impacts of the latest COVID-19 outburst in Shanghai.
According to the survey, 54% of 167 U.S. firms operating in China surveyed said the pandemic complications in Shanghai prompted them to slash revenue projections for 2022. 38% of the respondents said time was early to estimate the effect.
Yet, hardly any company said they were immune from the recent outbreak, with 99% confirming being affected.
The aftermath on manufacturing was also significant, with 60% of respondents reporting sluggish or reduced output due to a lack of staff, difficulties in procuring supplies, or government-ordered lockdowns.
82% of manufacturers confirmed stalled or curtailed production. In terms of supply, 86% of them confirmed interrupted supply chains.
Shanghai, a financial hub of more than 26 million, entered a two-phase lockdown on March 28 after nearly a month of trying to handle the COVID-19 resurgence. Several buildings and areas were already sealed up beforehand.
During the lockdown in Shanghai, only a very small portion of producers was allowed to continue operations even under a closed-loop or only partially. According to Reuters, Tesla’s Shanghai factory has prolonged its closure as the company failed to secure permits from the local government.
Likewise, according to the AmCham survey, opinions are somewhat split about the effectiveness of China’s approach to controlling the pandemic, with 51% agreeing that the efforts played a role in controlling the pandemic.
But in terms of quarantine periods and travel curbs, respectively, 70% and 69% of the respondents disapproved. The city entered the second-phase lockdown on Friday, with some areas from the first phase seeing restrictions unremoved.
The survey gathered opinions from 167 U.S. firms in China, 120 of whom have operations in Shanghai.