Following in the footsteps of Corona, 1 out of every 4 companies in Europe have to withdraw business from China
While Corona is still wreaking havoc in China, one in four European companies is considering withdrawing investment from China and closing its business. Strict lockdown has been imposed in many cities of China to fight Corona. As a result, trade and business activities have come to a standstill. The world’s second largest economy is in the grip of recession. European companies have decided to take the time leap. According to a report by the European Union Chamber of Commerce from China, 23 percent of companies are preparing to withdraw their business and investment from China.
waiting exit strategy
COVID restrictions are still in place in Shanghai and Beijing, China. European companies are now looking at new business strategies and strategies for investing abroad.
family damage to business
In China, restrictions have hurt families. Profits of foreign industrial companies operating in China fell 16.2 per cent in January-April. Profits have increased in government enterprises. However, all eyes are on how the automobile and property sector is recovering.
China’s situation cannot be expected to improve
The survey was conducted at the end of April. Shutdowns are still underway in Shanghai, China, and restrictions in cities such as Jilin have disrupted business. Of the many companies in Europe, 372 gave their opinion in April and 620 in February. “The whole world can no longer wait for the situation in China to improve,” said Shon Behanzin, the chamber’s vice president. Only 31 percent of American companies operate in China.
What do companies think?
Of companies seeking to move their investments outside China, 16 percent voted to move their investments and businesses to Southeast Asia. 18 percent decided to move their business to Asia Pacific, 19 percent to Europe, 12 percent to North America and 11 percent to South Asia.