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European Companies Sound Alarm on China's COVID-19 Policy

Some European companies are considering leaving the China market due to China's COVID-19 policy. On May 5, the European Chamber of Commerce in China released a survey showing that almost a quarter of respondents are thinking about moving their investments elsewhere, more than double the number that were considering doing so at the beginning of 2022.

Citing the "massive uncertainty" caused by stringent pandemic control measures introduced across the country in recent months, the report finds that three-quarters of the 372 European companies that responded have been negatively affected as a result. Logistics and business travel are the main areas affected, with ninety-two percent of respondents reporting supply chain problems caused by port closures, increased transportation costs, and other factors.

Apart from China's COVID-19 measures, some European companies are also concerned about the impact of the war in Ukraine on the business environment in China. According to the report, a third of respondents say that China is a less attractive investment destination due to the impact on global supply chains, as material and energy costs increase, and the transport of goods to and from Europe is made more difficult. European companies are not the only ones warning about the negative business impact of strict COVID-19 measures in China. Multinationals have also been sounding the alarm in recent weeks, including Starbucks and Yum China.