US companies say the Shanghai lockdown to a Covid-19 surge in April and May forced them to slash revenue outlooks, a survey by a business group shows.
Of 133 member companies surveyed by the American Chamber of Commerce in Shanghai, 93% said they had reduced their revenue forecast for this year, with a quarter expecting a drop of more than 20% compared with original projections.
A quarter of the 64 consumer and services companies and 20% of the 69 manufacturers said they planned to decrease investment in China.
“Although our member companies are resuming operations, the impact of the Shanghai lockdown … has been profound,” Eric Zheng, president of AmCham Shanghai, said. “As a result, nearly a quarter of them have cut their investments plans.”
Only one company said it planned to increase investment in China.
On the positive side, AmCham said 74% companies had no unexpected resignations of expatriate staff due to the recent lockdowns.
Operating Below Capacity
The survey, conducted a week after Shanghai’s population of 25 million officially exited lockdown on June 1, also found only 35% of manufacturers operating at full throttle, with a quarter operating below 75% of usual capacity.
The most common issue they reported as inhibiting production during the Shanghai lockdown was the inability of workers to move freely between homes and workplaces.
“To restore confidence, the Shanghai government must act quickly to ensure unhindered supply chains, logistics and worker mobility and to accelerate the provision of financial support to businesses,” Zheng said.
The Shanghai lockdown fuelled widespread frustration and even rare protests among its residents as they struggled to access necessities and lost income.
It also battered China’s economy, disrupting supply chains and slowing international trade.
“Shanghai should return to its pro-business mindset while dealing with the pandemic,” Zheng said.
- George Russell, with Reuters
Shanghai Land Sales Yield 33% Rise Despite Covid Slump
Cargo Reopening in Shanghai Ripples Across the Pacific
China Covid Curbs Will Harm its Popularity for Years: AmCham