Politics “zero Covid “of China negatively affects the confidence of European companies

One studio published today, Thursday, revealed that the strict “Covid-19” policy pursued by Beijing has lost “much of its attractiveness” for many European companies due to disruptions in supply networks, the slowdown in activity and the decrease in the workforce.

The second largest economy in the world seeks to eliminate any Corona virus outbreak as soon as it appears by isolating specific areas and conducting test mass, but the highly contagious mutant Omicron complicates this strategy.

A report published by the European Union Chamber of Commerce in China claimed that the isolation operations in dozens of Chinese cities questhave caused “large-scale disturbances”.

The report, which was drafted in late April and included more than 30 members, added: “Although the war (in Ukraine) has had repercussions on operating European companies in China (Covid-19) represents a more urgent challenge and has caused a significant drop in institutional confidence “.

Nearly a quarter of respondents started thinking about shifting their current or planned investments from China to other markets, a number that doubled in two months.

The studio showed that nearly 60% reduced their income forecasts for questyear, while about a third saw a decline in the workforce.

Most companies have also noticed a negative impact on their supply networks, with difficulties in sourcing materials prime and components or in the delivery of final goods.

The European Chamber of Commerce said: “The Chinese market has lost much of its appeal for many of the respondents.”

“The Chinese market has become very volatile,” House Speaker Jörg Woetke told reporters.

He added that “the isolation and paralysis of the city of Shanghai created shocks even for the parent companies” of the operating groups. in China, asking: “When will all this end?”

Under these circumstances, Wutke noted, “China could become a victim of its past successes.”

According to it studiocompanies have also been affected by the war in Ukraine, which led to logistics disruptions with Europe.

The studio stresses the need for businesses to prepare for potential “future shocks”, in in particular “the potential deterioration of relations between the EU and China”.

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