Absa Bank Kenya Partners with Huawei to Build a New Digital Foundation for Branch NetworksRead more Stylish and compact, these new Canon instant printers make creative pursuits easyRead more Nigerian Law Enforcement agencies open investigations on Hawilti and company executives for criminal breach of trust, cheating, defrauding investors schemeRead more Famine looms in Somalia, but many ‘hunger hotspots’ are in deep troubleRead more Launch of the 3rd Edition of the Choiseul Africa Business Forum, a Must-Attend Event for the Business Community in Africa October 19th & 20th, 2022 in Casablanca, MoroccoRead more World’s Biggest Afrobeats Music Festival Afro Nation Extends Partnership with APO Group until 2025Read more Master Trainer (MT) National Meeting on Sustainable Coffee Practices Organized by The International Islamic Trade Finance Corporation in Collaboration with The Sustainable Coffee Platform of Indonesia (SCOPI)Read more Thai Ambassador met the Thai Community in Dar es Salaam and Zanzibar and visited the Buddhist Temple in TanzaniaRead more Generation Africa awards US$100,000 to two young agripreneurs from Kenya and Uganda in the fourth annual GoGettaz Agripreneur Prize Competition at the African Green Revolution Forum Summit in Kigali, RwandaRead more Medicaid Cancer Foundation and AstraZeneca celebrate Prostate Cancer Awareness month with the launch of Project Icon NigeriaRead more

Zero-Covid harming 75% of European firms in China: business group

show caption
China is the last major economy wedded to a strategy of stamping out emerging virus outbreaks as they arise./AFP
Print Friendly and PDF

Sep 21, 2022 - 12:49 PM

BEIJING, CHINA — China’s “inflexible” and “inconsistent” zero-Covid policy is crippling European business operations in the country, a major business lobby said Wednesday, warning that the presence of the companies “can no longer be taken for granted”.

The report by the European Union’s Chamber of Commerce in China marks the latest statement by the foreign business community that Beijing’s hardline virus curbs are harming the world’s second-largest economy and isolating it on the international stage.

China is the last major economy wedded to a strategy of stamping out emerging virus outbreaks as they arise, through a combination of snap lockdowns, mass testing and lengthy quarantines.

Despite sparking business closures and roiling global supply chains, President Xi Jinping has declared the approach China’s most “economic and effective” path forward, and officials have not indicated when the rules might be eased.

The European Chamber — a group of more than 1,800 European companies in China — said in a position paper that zero-Covid and its “massive uncertainty” had had a “negative impact” on 75 percent of its members’ operations.

“China’s business environment will remain unpredictable as long as the threat of lockdowns exists,” the organisation said, calling Xi’s flagship policy “inflexible and inconsistently implemented” and cautioning that ideology seemed to be “trumping the economy”.

It added that the situation had prompted nearly a quarter of firms to consider shifting current or planned investments out of China, the highest percentage in the past decade.

Despite China’s significant growth potential, “the extent of European firms’ engagement can no longer be taken for granted”, the report said.

China in June reduced the length of mandatory quarantine for inbound travellers from 21 to 10 days, but a lack of flights and sky-high ticket prices remain a major obstacle to travel.

The near-total shutdown of the country’s borders since 2020 has quickened an “exodus” of European nationals and left those who remain more isolated than before, according to the report.

If Beijing continues to persist with the policy, “the business environment will continue to become more challenging”, it said.

In a foreword to the report, European Chamber President Joerg Wuttke wrote that “the rest of the world has largely resumed pre-pandemic levels of ‘normality’, but China remains reluctant to open its doors”.

European companies “need China to fulfil its huge economic potential”, he added.

China’s economy expanded just 0.4 percent in the second quarter as virus restrictions across swathes of the country caused business shutdowns and roiled supply chains.

Analysts say the country is set to miss its annual growth target of around 5.5 percent by a wide margin.

MAORANDCITIES.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.