Truck drivers, such as the one pictured here in Shanghai in late April, typically need to show valid negative virus tests in order to move goods between cities in China. The American Chamber of Commerce in China said members have reported varying implementation of Covid controls depending on city and province.
Vcg | Visual China Group | Getty Images
BEIJING — More U.S. businesses in China are cutting revenue expectations and plans for future investment as Covid controls drag on, a new survey found.
Between late March and late April, the share of respondents reporting an impact from Covid restrictions rose by 4 percentage points to 58%, according to an American Chamber of Commerce in China survey released Monday.
While that’s not a large increase, 4 or 5 percentage points every month could be “very significant” if Covid controls persist for another five months, Michael Hart, AmCham president, told CNBC in a phone interview.
Asked what impact Covid restrictions will have if they last for the next year, more than 70% of respondents said their revenue or profit would be cut.
The latest study, conducted from April 29 to May 5, covered 121 companies with operations in China. That time period included the latest Covid restrictions in the capital city of Beijing.
Two, three, four years from now, I predict a massive decline in investment in China because no new projects are being teed up, because people can’t come in and look at space.
Michael Hart
president, AmCham China
The prior survey was conducted with AmCham Shanghai in late March, just as Shanghai’s original plan for a two-part lockdown were starting. Those measures have lasted for far longer than the initial week.
In the last few days, Beijing city postponed the reopening of schools until further notice, and ordered all non-essential businesses in a major business district to close temporarily or have their staff work from home.
“There are very few aspects of the economy which seem to be functioning,” a survey respondent said in the report, which withheld the respondent’s name and location. “[While] COVID-19 restrictions can be managed, what [will be increasingly difficult to] manage is lack in overall growth of the economy and what appear to be growing economic headwinds.”
Companies cut China investment plans
The prolonged Covid controls — as mainland China tackles its worst virus outbreak since early 2020 — have further discouraged U.S. businesses from investing in the country, the AmCham survey found.
The percentage of respondents reporting decreased investments as a result of the latest outbreak and restrictions rose to 26% versus 17% a month earlier.
Those reporting a delay in investments fell slightly to 26%, versus 29% in the previous survey. The proportion who said it’s too early to predict or haven’t decided on the impact on investment plans rose to 44% in the latest survey, up from 30% in the prior study.
Official figures show a steady increase in foreign direct investment from all countries…
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