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Covid: will French companies leave China?

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In China, the authorities apply the zero Covid policy and confine entire cities as soon as a few cases appear. The health restrictions of the communist regime weigh on European, French or American companies established in the country. Many of them are considering reducing their revenue forecast, or even leaving China.

ANALYSIS

In China, European and French companies are sounding the alarm. The country is still applying strict health restrictions in order to fight against the Covid. These measures and the lack of visibility on the future lead most Western companies to reduce their revenue forecast for the current year, or even to consider leaving China.

“75% of representatives of French companies (…) plan to leave”

The equivalent of 40% of Chinese GDP is impacted by Covid-19 restrictions. A situation that weighs on Western companies established in the country. According to a survey published by the French, European and American chambers of commerce, 60% of foreign companies in China have reduced their revenue forecasts for this year. From the famous French group Pernod-Ricard to Valeo via Coca-Cola and Apple, all complain about confinements. 1,100 French companies are in China. Many are considering leaving the country.

β€œ75% of the representatives of French companies in China, Beijing and Shanghai who are in confinement, plan to leave perhaps even this summer. Under these conditions, doing business in China remains extremely uncertain”, declares GrΓ©gory Louvel lawyer business in Beijing.

These departures do not move the communist regime, whose authoritarian and nationalist turn had already begun to scare away many expatriates before the pandemic. Nevertheless, Beijing’s stubbornness in its fight against Omicron is likely to further damage the image of the factory in the world. China is the last major country not to have reopened its borders.

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