As China continues its strict “Covid Zero” policy, American businesses based in China are slashing their revenue projections for 2022 and residents throughout the country are stockpiling food and personal-care items, according to The Washington Post (subscription), The Wall Street Journal (subscription) and CNBC.
What’s going on: “In Beijing, where some residential districts have been closed in recent weeks as infections have been discovered, supermarket shelves in some parts of the city have been picked clean of toilet paper, canned foods, instant noodles and rice in recent days,” according to the Wall Street Journal.
- “China’s [‘Covid Zero’] policy of aggressively stamping out infections has already led to food rationing and medical shortages in Shanghai, as well as an outpouring of displeasure by its 23 million residents.”
The business effects: “Since the pandemic began in 2020 and China tightened restrictions on international travel, foreign businesses in China have complained of long quarantine requirements upon arrival and difficulties of bringing in senior management or technical staff,” according to CNBC.
- Over 80% of manufacturers polled in a recent survey by the American Chamber of Commerce in China said they had experienced slowed or reduced production in addition to supply chain disruptions since China’s latest COVID-19 outbreak, according to CNBC.
- What’s more, the lockdowns have “added to weak investment and a broader downturn in the property market. Goldman Sachs Group Inc. cut its forecast for China’s growth in 2022 by 0.5 percentage points due to the increased difficulty of containing the omicron variant,” according to The Washington Post.