[The Epoch Times, May 15, 2022](The Epoch Times reporter Zhang Ting comprehensive report) The CCP’s zero policy has hit foreign companies in China hard, prompting many companies to consider relocating their investments outside China. Xinhua News Agency, the mouthpiece of the CCP, issued an article on May 12, calling on foreign businessmen not to leave, and the test of the epidemic will pass. However, the outside world has highly questioned whether the “clearing” policy is effective.
Xinhua News Agency stated at the beginning of the article that the CCP’s epidemic control measures have worried foreign chambers of commerce, and some foreign companies will consider China’s “alternative options”.
The article also mentioned several times “unswervingly adhere to the general policy of ‘dynamic clearing'”, and also tried to guarantee the benefits of the clearing policy to foreign companies.
The article asks foreign companies to take a long-term view and choose to overcome the difficulties together with China.
However, the policy of clearing Omicron, a highly contagious variant of the CCP virus (new coronavirus), has made the outside world highly questioned its effectiveness, and worried that blockades will continue to appear in different parts of China, and the lifting of the blockade is still in the future, causing enterprises to be trapped for a long time. predicament. European and U.S. companies in China have expressed concern about an increasingly unstable investment environment.
WHO warns clearing is unsustainable
Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization, made the WHO’s views clear on May 10. He said Beijing’s zero policy was unsustainable given what is currently known about COVID-19.
Tedros also said the WHO has discussed the issue with Chinese experts. He said increased understanding of the virus and better ways to fight it also showed it was time to change tack.
Tedros’ views and suggestions on the zero policy were subsequently blocked on Chinese social media.
Expert: As long as the zero policy is talking about economic stimulus, it is useless
China’s leader, Xi Jinping, recently asked the whole of society to go all out to boost the country’s economy through infrastructure investment, as the zero-clearing policy has hit China’s economy hard. Yahoo Finance said this showed growing concern within Beijing about the outlook for economic growth. The CEO of the China Beige Book said that if the CCP insists on the zero-clearing policy and cannot control the infection, any economic stimulus policy is meaningless.
Leland Miller, CEO of China Beige Book, told Yahoo Finance, “If 40% of the[China]population is locked down or 40% of China’s GDP is locked down, you can talk about stimulus (policy) as you please, But what are you trying to stimulate?”
“You don’t have the usual options to energize the economy in a normal way. So, you know, they’re in a very tough position. There’s a potential for an absolute ‘bloodbath’ in the second quarter,” Miller said. .
Foreign Chamber of Commerce: If you do not change the zero foreign companies will vote with their feet
On May 5, the European Union Chamber of Commerce in China (hereinafter referred to as the European Union Chamber of Commerce) released a report saying that in a recent survey, European companies said that the CCP’s “zero policy” on the epidemic had severely hit their supply chains, and they were forced to Cut staff, lower revenue forecasts. Nearly a third of those companies said they had made layoffs.
“Zero is not going to work because the world has learned to live with COVID-19 and China has to change its strategy,” said Jorg Wuttke, president of the European Union Chamber of Commerce. (Zero policy), we will vote with our feet and go to other places (investment).”
European companies in China are increasingly looking to divert their investments to other markets. According to the internal survey, 23% of the 372 companies that responded were considering moving current or planned investments out of mainland China, more than double the January survey and the highest percentage in a decade . About 78% of respondents said mainland China is now less attractive to investors due to the so-called zero-clearing policy.
In an April 8 letter to China’s State Council and Vice Premier Hu Chunhua, the EU Chamber of Commerce made it clear that “the ‘old toolbox’ of mass testing and isolation cannot meet the challenges posed by the Omicron variant.”
In addition to European companies in China, American companies in China have also lowered their investment confidence due to the zero-clearing policy. The American Chamber of Commerce in China (the American Chamber of Commerce for short) said on May 9 that 58% of US companies in China lowered their annual revenue forecasts, and 51% of US companies will reduce or delay their investment in China.
Colm Rafferty, chairman of the American Chamber of Commerce, said that the authorities’ anti-epidemic measures have hit American companies’ confidence in investing in China, and companies “still see no light at the end of the tunnel.”
Hua Ganglin said, “We are preparing to deal with the wave of foreign talent this summer. Fewer and fewer overseas employees are willing to take over the vacancies here in China.”
Responsible editor: Lin Yan#