Stopped trucks, foldable beds for workers: what European businesses face

Shanghai, home to the world’s largest container shipping port, launched a two-part lockdown on March 28 and has yet to announce when sanctions will be lifted.

Yang Jianjheng | Visual China Group | Getty Images

BEIJING – According to several episodes from China’s EU Chamber of Commerce, China’s coveted control has disrupted supply chains and primarily focused on the daily lives of workers in Shanghai and Shenyang.

Mainland China has struggled to control the worst waves of the Covid in the last few weeks since the initial outbreak of the epidemic in early 2020. Although rapid lockdowns have helped the country control the virus and return to growth, the recent outbreak has evolved from more contagious. omicron variant.

Shanghai, home to the world’s largest container shipping port, launched a two-part lockdown on March 28 and has yet to announce when sanctions will be lifted.

EU Chamber members estimate that volumes at the port of Shanghai have dropped by almost 40% week-on-week, Betina Schwein-Behanjin, chair of the Shanghai Chapter and vice president of one of the chambers, said on Wednesday.

He noted that while the port is “technically doing business as usual,” logistics are still challenged by a shortage of truck drivers who are stuck in lockdowns or need frequent negative virus tests.

Shanghai International Port Group said in a statement on Saturday that the ship’s ability to reach its destination for unloading or loading cargo was overall more efficient than last year. As of March 28, the average wait time for container ships at the port was less than 24 hours, the port said.

“Shanghai is a kind of exception,” said Schwein-Behanjin. “There is a strong sense of uncertainty throughout the city. It is fueled by a shortage of supplies, endless lockdowns and a real fear of being sent to that quarantine camp. “

In an effort to curb the increase in cases, Shanghai authorities have set up temporary quarantine centers.

Schwein-Behanjin noted that people living in the town’s lockdown had to wake up at 4 a.m. to compete for online vegetable supplies.

Schwein-Behanjin says businesses – whether in the food, pharmaceutical or chemical industries – are allowed to maintain activities and keep their workers bubbling around production facilities.

“We hear more and more that some workers are no longer volunteering because they are not there,” he said [a] The visible ends and they do not want to eat and sleep on the site, ”he said.

Local authorities last month approved a similar location work policy at Shenzhen’s Southern Technology and Manufacturing Center during a week-long lockdown.

Two days after the lockdown was lifted, Claus Jenkel, chair of the EU Chamber South China chapter, said the company he visited still had “many, many foldable beds” – which he planned to keep in business because he was not sure if they would be needed. . Soon again.

China’s Ministry of Commerce did not immediately respond to a request for comment.

Locals in the northern Chinese city of Shenyang have been on lockdown for more than two weeks, according to local chapter chair Harold Kumpfart.

He said BMW’s joint venture in the city could initially maintain production, but had to close after an indefinite period “because the supply chain could not be maintained.”

“Any traffic on the road is closed,” Kumpfart said. “If you are on the street and you do not have special permission, you will be caught by the police.”

BMW did not respond to a request for comment from CNBC.

With factories on the outskirts of Shanghai and in a large city in Jilin Province – also in Lockdown – Volkswagen said the two production sites would be closed on Wednesday and Thursday.

Kumpfart speculated during Wednesday’s webinar that a member company was unable to obtain a loan because a bank said it was unable to provide a loan due to insolvency and bankruptcy. It is unknown at this time what he will do after leaving the post.

Representatives of the EU chamber in the southwest and other parts of China have noticed some disruptions in the supply chain, but Kovid’s influence in local affairs is less. The chamber noted that they did not know what the Kovid situation was like in rural China.

City analysts said Wednesday that they see “substantial impact on usage”, but less on production and investment from Omicron waves in March.

“Although Shanghai and Guangdong provinces accounted for 7.3% and 23.1% of China’s exports and 20.4% and 18.5% of imports in 2021, we think the impact on trade is manageable: Shanghai’s half-city lockdown only started on March 28, when It was completed in, “analysts said. They expect GDP growth of 4.7% in the first quarter, up from the previous forecast of 3.8%.

Last week, a survey of American businesses in China found that 54% of respondents lowered their 2022 revenue estimates for the year due to the latest Kovid-19 outbreak.

Among manufacturers, more than 80% reported slowing or declining production, as well as supply chain disruptions. China’s Beijing-based American Chamber of Commerce and its Shanghai counterpart conducted the survey last week.

The long-term impact of Covid in China – especially as Shanghai’s lockdown continues – is to retain the talent, EU Chamber of Commerce representatives say. They noted how the need for covid-related travel and segregation, especially for entry into the country, has already discouraged new foreign workers from taking jobs in China.

Shanghai has become a center of foreign business in the country, partly because of the city’s culture and system – with a large number of international schools and hospitals.

“Everyone is shocked that this happened to Shanghai. It is not in the middle of Hunan. This is Shanghai, “said Joerg Watt, president of the chamber.

Wuttke estimates that the number of foreigners on the mainland has halved since the epidemic began and could halve again this summer. All in all, he hopes that the total population of Europeans in the country is declining so fast that they will fit in at Bird’s Nest Stadium in Beijing.

The stadium has a permanent capacity of about 60,000 seats.

The number of foreigners living in Beijing and Shanghai dropped by 41.5% and 21%, respectively, between the 2010 and 2020 official censuses. In these ten years, the total number of foreigners in the country has increased by about 40% to 1.4 million people.

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