China's zero-COVID-19 policy is having an impact on U.S. firms doing business in the country.
President Xi Jinping, after taking an inspection tour of Hainan, stated that the country “cannot relax the prevention and control work,” Sinocism reported.
It appears that China will continue with its zero-COVID-19 policy.
The policy entails limiting travel to and from China with additional restrictions on internal movement.
Foreign travelers into China are screened and are required to quarantine in government-designated hotels for at least two weeks, followed by a further period of monitoring. Regular community testing programs are carried out, and if infections are detected, those testing programs remain in place.
Residents can be evicted and sent to quarantine facilities (along with targeted area lockdowns) if an infection is detected. All non-essential businesses have been closed, except for grocery stores and some other essential suppliers. Public transportation and most vehicle movement is suspended and schools are closed.
The U.S.-China Business Council, a private, nonpartisan, nonprofit organization of more than 260 American companies that do business with China, has expressed its concern over the policy.
Douglas Barry, the USCBC vice president for communications and publications, told Globe Banner that it is having a “significant” impact.
“The stresses created by the shutdowns in Shanghai and adjoining regions are significant,” Barry said. “Company operations, supply chains and staffing capabilities are significantly impaired, which is compounded by coordination challenges with local governments.
“Some companies can operate themselves but their staffing levels take a hit because of ongoing testing and isolation requirements, and most are increasingly worried about supply shortages due to lack of available or allowable shipping and transportation from upstream suppliers,” he added. “There are also concerns about worker safety if they do test positive for COVID-19 and are sent to an undisclosed quarantine facility without clear guidance on when or how they can leave. Some U.S. companies in China have temporarily stopped operations and work to keep their employees and families safe. In Shanghai it’s difficult to send goods by truck across the city, never mind getting them out of the city.”
In a letter to Chinese Vice Premier Hu Chunhua, the European Union Chamber of Commerce in China stated “significant disruptions, extending from logistics and production all the way along the entire supply chain within China.” and recommended following Singapore’s COVID-19 control measures.
Singapore’s measures include allowing positive cases with no or mild symptoms to quarantine at home, thereby alleviating pressure on the health system.
Barry said the USCBC is making sure U.S. officials are aware what this policy is doing to companies.
“We have conveyed these concerns to officials at the highest levels of government,” he said. “The U.S. Embassy and its new ambassador are also in touch with relevant authorities. Recently, we helped a member company get a permit from the Shanghai government to allow goods trucks to enter the city.
“Financial losses could be significant depending on how long the different lockdowns persist,” he said. “Knock-on effects, such as China’s travel policy, make it extremely difficult to send managers from the U.S. to China, which can hurt productivity.”
Barry said the Chinese strategy may wind up being ineffective in the long run.
“China has done an amazing job keeping people safe for more than two years," he said. "But this is a wily virus that seems on the verge of defeating all of the protective resources thrown against it, requiring a different balance between suppression and adaptation. Neutral experts, including many in China, seem to agree that zero-COVID-19 strategy is not sustainable.”