US firms in China cut investment, revenue goals on Covid Zero
AMERICAN businesses in China are slashing investments and lowering revenue projections as Covid lockdowns hit operations and supply chains, a survey shows.
More than half of the 121 companies polled by the American Chamber of Commerce in China (AmCham China) have either reduced or delayed investment in the country, while nearly 60 per cent of them lowered their income forecasts for this year following the latest outbreaks, according to a statement.
“We understand China choosing to prioritise health and safety above all else, but the current measures are throttling US business confidence in China,” Colm Rafferty, chairman of AmCham China, said in the statement. “An already challenging situation continues to worsen,” he said, adding that companies “don’t see any light at the end of the tunnel”.
New virus clusters emerging across China since March have led to stringent lockdown measures, causing a sharp contraction in economic activities and a slowdown in export growth. While top leaders have pledged to support the economy, they have also defended the Covid Zero strategy that seeks to eliminate all infections.
More than 15 per cent of the US companies with operations in Shanghai - which has been placed under lockdown for more than a month - reported their business there remains fully shut, according to the survey conducted between Apr 29 and May 5.
Nearly 60 per cent of the respondents, who have operations throughout China, said production capabilities were slowed or reduced due to a lack of employees, difficulty in getting supplies, or government-ordered lockdowns. While almost a quarter of the surveyed companies said China’s recent policy measures to improve logistics have had a positive impact on their operations, another 41 per cent report continuing damage from supply chain disruptions. BLOOMBERG
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