The “inflexible” zero Covid policy in China and its “inconsistencies” has negative consequences on three quarters of European companies in the country, denounces Wednesday (21 September) the Chamber of Commerce of the European Union.
China is the last major economy to maintain a strict health strategy in the face of the coronavirus: quarantine of people who test positive, targeted confinements or generalized and compulsory PCR tests.
But this policy has serious repercussions on the economy, with a number of businesses closing unexpectedly, tourism at half mast, factories operating at idle and production chains very disrupted.
As a result, the anti-Covid-19 measures and “huge uncertainty” that they cause at the top of the concerns of European companies in China, according to an annual survey by the Chamber of Commerce of the European Union (EU) in Beijing.
“As long as the threat of confinement exists, the business environment there will remain unpredictable”laments the House, citing a zero Covid policy “inflexible and implemented inconsistently”.
This situation now leads 23% of European companies surveyed to consider investing outside of China. This percentage is at its highest for 10 years, notes the study.
China has significant growth potential and an unparalleled production chain, but even so “the commitment of European companies cannot be taken for granted”warns the EU Chamber of Commerce.
2020, the country’s borders are almost completely closed, which heavily penalizes social interactions with foreigners as well as family reunions.
“If China persists on this path, the business environment becomes more complicated”which will accelerate “exodus” of European nationals, warned the Chamber.
China in June reduced the length of mandatory quarantine for travelers arriving in the country from 21 to 10 days. But the low number of air connections with China and the exorbitant price of tickets remain a major obstacle to travel.
The zero Covid strategy, defended tooth and nail by Chinese President Xi Jinping, is increasingly contested by the business community, which is alarmed by the threats that confinements pose to activity.
“Right now, ideology trumps economics”deplores the EU Chamber of Commerce.