22% of US Companies in China Say Normal Operations Impossible Until This Summer

[Asia Economy Beijing=Special Correspondent Park Sun-mi] It has been revealed that 22% of American companies operating in China expect that normal operations will be impossible at least until mid-year due to the spread of COVID-19.

On the 26th, the Hong Kong South China Morning Post (SCMP) cited the results of a survey conducted by the American Chamber of Commerce in China between the 14th and 18th, targeting 119 American companies operating in China, reporting that American companies are experiencing significant difficulties in normalizing business activities due to a sharp decline in demand and restrictions on worker mobility caused by COVID-19.

Although China internally judges that the COVID-19 spread situation is calming down and is encouraging companies to normalize operations, 68% of American companies responded that they are still facing difficulties due to population movement restrictions within China. This is double the 28% response rate from a similar survey conducted in February.

Additionally, 39% of companies reported experiencing a decrease in product demand due to the global spread of COVID-19. This is also higher than the 22% reported in the February survey.

While 25% of companies said that normal operations would be possible around the end of April, 22% predicted that normalization would be difficult at least until this summer. Furthermore, only 28% of companies reported experiencing sales declines due to the spread of COVID-19 in last month's survey, but in this survey, about half reported experiencing sales decreases.

Sixty percent of American companies operating in China expressed concerns that if the normalization of business activities is delayed until the end of August, their sales this year could decrease by 10-50%, or even more in severe cases. However, only 3% of companies said they are considering withdrawing from the Chinese market or relocating production facilities outside China due to the COVID-19 situation.

These survey results contrast with the Chinese government's announcements that foreign companies have largely recovered from the COVID-19 impact. The Guangdong provincial government, where many foreign companies are concentrated, stated that 94% of foreign companies in the region have resumed operations, and Beijing city announced that over 70% of foreign companies had resumed production as of the 24th. Chinese state media such as Xinhua News Agency have focused on reporting the resumption of operations by foreign companies in China, portraying the damage as minimal.

Greg Gilligan, chairman of the American Chamber of Commerce, said, "Many member companies are still fighting the challenges brought by COVID-19, and now we have to worry about the global shock as well," adding, "Since last month's survey, COVID-19 has spread into a pandemic, and half of the companies are concerned that the global spread will significantly impact their business in China."

This content was produced with the assistance of AI translation services.