Washington: Beijing’s zero Covid policy has become a top concern for US firms as strict lockdowns had forced US companies to shut down for months, creating significant uncertainties for businesses in the country, according to an annual survey released US-China business council on Monday.
More than half of the 117 respondents in the survey said they had paused, delayed or axed their investment plans in China due to its strict containment strategy, according to Strait times.
The stringent COVID-19 policy has gripped the lives of people in China and has now started to displace tensions between the United States and China to become the American firms’ chief worry for the first time in five years.
“The looming possibility that companies will again be forced to partially halt operations due to lockdowns and the impacts of local controls on consumer demand have undermined confidence in the business environment,” said the business council’s president, Mr Craig Allen, at a press conference.
The lockdowns have forced US companies to shut down for months, and prevented many US executives from visiting their China operations for several years, he said adding that even if China decided to backtrack on its Covid-19 policies, 44 per cent of the respondents said restoring business confidence would take years.
The survey was conducted in June this year, shortly after a period of widespread lockdowns in response to Covid-19 cases across China, especially in Shanghai.
24 per cent of respondents had shifted parts of their supply chains out of China, compared with 14 per cent in the previous year over the past twelve months, however, the majority of 78 per cent had kept their supply chains in China despite lockdowns and tariffs, the survey report noted.
According to the report, about two-thirds of respondents were in a wait-and-see mode for a long duration and a third of respondents also said they were worried about being targeted by negative media coverage in China, reported Strait Times.
Beyond Covid-19 restrictions and geopolitical tensions, companies named data, privacy and cyber-security laws, rising costs and technology decoupling between the US and China as their other main concerns.
In the last two years, while the rest of the world rose to the occasion and meandered its way through the global health crisis, China has clung to its futile attempt at feigning control over an impossible situation.
However, the unending restrictions have upended daily life and dealt a heavy blow to the slowing economy. In July, youth unemployment in China hit a record high, with one in five young people out of work.
Earlier this month, Covid outbreaks in the resort island of Hainan and the western regions of Xinjiang and Tibet trapped tens of thousands of tourists.
In the southwestern metropolis of Chongqing, authorities ordered mass Covid testing during a record heat wave, leaving millions of residents standing under the sun for hours as they struggled with extreme temperatures and power shortages.
The country’s aggressive stance at tackling the virus is spread across various responsive measures, including contact tracing, constant testing at a mass scale, flash lockdowns and social isolation- every one of these ‘protective’ measures plays a prominent role in creating further, more insidious problems for the common man.