The European Union Chamber of Commerce in China warns of fractured supply chains resulting from the zero-COVID approach, saying that European companies operating in the country are struggling to cope with lockdowns, and their business confidence diminished.
At a media event held on April 6, Jörg Wuttke, the Chamber’s president, said that China’s erratic enforcement of the zero-Covid approach is making businesses manage to adjust operations.
The Chinese government recorded more than 20,000 new daily cases on April 5. This figure is driven by surging infections in Shanghai where 25 million people have been confined to their homes in a long-term lockdown to stop the spread of the coronavirus.
According to the EU commerce chamber, large manufacturers have maintained operations by using a closed-loop system, keeping employees at factory locations, and giving them regular tests.
Bettina Schoen-Behanzin, the chair of the chamber’s Shanghai chapter, stated that even with permission to operate amid restrictions, work can be “very, very difficult.”
Meanwhile, smaller companies have been forced to shut down all manufacturing for several days in some cities.
Klaus Zenkel, chair of the group’s South China chapter, said that smaller firms “may face bankruptcy when they cannot deliver their products to the customer.”
Moreover, some supply chains grind to a halt due to production shortages and strict Covid testing requirements for all equipment coming from outside of China.