Nearly a quarter of European companies in China are considering shifting their investments out of the country as COVID-19 outbreaks and lockdowns dim the outlook for the world’s second-largest economy, a survey showed.
About 23 percent of the businesses that responded to the survey are thinking of moving their current or planned investments away from China, a report released yesterday by the EU Chamber of Commerce in China said.
The survey was conducted at the end of April, when Shanghai was still in shut down and restrictions in places like Jilin Province disrupted business activity.
The number of European firms reassessing their options in China was the highest proportion in a decade, and also more than double the 11 percent recorded in a February poll, the chamber said, adding that 372 businesses responded to the April poll, whereas 620 responded to the February one.
China’s current policy — with no exit strategy for its zero tolerance approach to combating infections — “leaves headquarters no option but to look for other locations,” chamber vice president Bettina Schoen-Behanzin said. “The world does not wait for China.”
Of the firms considering a shift in investment, 16 percent said they were looking at relocating to Southeast Asia, while 18 percent said they were looking elsewhere in the Asia-Pacific region, 19 percent said Europe, 12 percent said North America and 11 percent said South Asia.
It is not clear when the property and the automotive sectors — two major drivers of the economy — would recover, Schoen-Behanzin said, adding that European businesses are re-evaluating their position in the market as they wait to see how long the uncertainty lasts.
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