Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the uncertainty of the Chinese Covid control as well as the crisis in the Taiwan Strait has had an effect. It has made the voice of “foreign capital withdrawing from China” increase again. The European Union Chamber of Commerce in China released a report not long ago saying that China’s attractiveness as an investment destination is eroding and its strict Covid control measures have made EU companies in China lose confidence. Nearly a quarter of EU companies surveyed are considering moving existing or planned investments out of China. This is the highest number in the past ten years. Just about a month ago, a survey report released by the U.S.-China Business Council (USCBS) showed that optimism about the outlook for China’s business environment among U.S. companies in China fell to a record low. Around 96 percent of the U.S. companies surveyed say that their business in China has been negatively affected by the Covid control measures. More than half of the U.S. companies have suspended, postponed or canceled their investment plans in China due to the Covid measures. Citigroup chief Jane Fraser also said a few days ago that if China attacks Taiwan, the bank could significantly reduce its presence in mainland China. The latest EU Chamber of Commerce report, which collected data from 1,800 members, pointed out that China’s Zero-Covid policy has created “enormous uncertainty” and caused a “negative shock” to the operations of 75 percent of its members. The total number of EU citizens living in China has halved since the outbreak began. By the end of the summer of 2022, this number may be halved again. Not just Covid, the report also mentioned that the predictability, reliability and efficiency of the Chinese market are all decreasing. For example, the sudden power outage in 2021, the government’s sudden rectification of the technology and education/training industries, and other incidents all brought great uncertainty.
Source: Lianhe Zaobao, September 22, 2022