The “inflexible” Covid zero policy in China and its “inconsistencies” have negative consequences for three-quarters of European companies in the country, the European Union Chamber of Commerce denounced on Wednesday. China is the last major economy to maintain a strict health strategy against the coronavirus: quarantine of people who test positive, selective confinements or widespread and mandatory PCR tests.
But this policy has serious repercussions on the economy, with many businesses closing unexpectedly, tourism at half-staff, factories idling, and production chains very disrupted. As a result, anti-Covid-19 measures and the “enormous uncertainty” they cause top concerns for European businesses in China, according to an annual survey by the European Union (EU) Chamber of Commerce in Beijing.
“As long as the threat of confinement exists, the business environment will continue to be unpredictable,” laments the Chamber, referring to a “inflexible and inconsistently implemented” Covid zero policy. This situation now leads 23% of European companies surveyed to consider investing outside of China. This percentage is at its highest level in 10 years, the study notes.
Towards an “exodus” of European companies?
China has significant growth potential and an unparalleled production chain, but “the commitment of European companies cannot be taken for granted”, warns the EU Chamber of Commerce. Since 2020, the country’s borders have been almost completely closed, heavily penalizing social interactions with foreigners, as well as family gatherings.
In June, China reduced the length of mandatory quarantine for travelers arriving in the country from 21 days to 10 days. But the low number of air connections with China and the exorbitant price of tickets remain a great obstacle to travel. The Covid zero strategy, defended tooth and nail by the Chinese president, Xi Jinping, is increasingly questioned by the business community, which is alarmed by the threats that confinements pose to activity. “At the moment, ideology prevails over economics,” laments the EU Chamber of Commerce.
Source: BFM TV
