Continuing China's 'Zero COVID'... Warning "Foreign Companies May Leave"

Despite the morning rush hour on the 12th, the streets of Beijing's central business district in the Chinese capital appear deserted due to COVID-19 lockdown measures. [Image source=Yonhap News]

[Asia Economy Reporter Lee Chun-hee] There are opinions that foreign companies may withdraw due to the Chinese government's 'Zero COVID' policy, and that Chinese authorities need to respond accordingly.

According to Hong Kong's South China Morning Post (SCMP), on the 14th, Feng Feng, chairman of the Guangdong think tank 'Guangdong System Reform Research Association,' said, "If foreign investors leave because we insist on Zero COVID, China should definitely be concerned," adding, "To reassure them, simple and harsh measures in COVID-19 control should be limited." He further pointed out that "China's strength in having a complete industrial and supply chain should not be easily disrupted by quarantine policies," noting that this is currently the biggest obstacle to stabilizing foreign investment.

Huo Jianguo, former chairman of the China World Trade Organization (WTO) Research Association, emphasized that "to stabilize the economy, foreign investment must be stabilized," and stressed that foreign-invested companies remain important to China's economy. He also stated that the Chinese government must address the difficulties foreign companies face when operating in China. He said the key to retaining foreign investors is better coordination in virus control and business activities, avoiding a uniform approach, and ensuring fair and consistent treatment for all types of companies.

Recently, as lockdowns and travel restrictions due to China's Zero COVID policy continue, survey results have been emerging that foreign companies based in China are considering withdrawal. On the 12th, the German Chamber of Commerce in China conducted a survey of 460 companies and reported that 28% of foreign employees plan to leave China before or shortly after their employment contracts expire due to COVID-19 prevention policies. In a survey conducted by the European Union (EU) Chamber of Commerce in China, 23% of companies responded that they are considering redirecting current or planned investments to regions outside China due to COVID-19 controls. Similarly, a survey by the American Chamber of Commerce in China showed that more than half of the responding companies have postponed or reduced investments in China.