SHENZHEN, China (Reuters) – China’s strict COVID-19 controls will hamper foreign investment into the country for years to come as limits on travel block the pipeline for projects, the President of the American Chamber of Commerce warned on Tuesday.
There are few signs that American companies are leaving the China market, but the years-long process of research and due diligence for projects has been delayed, Michael Hart said at an event launching the chamber’s annual report.
“We’re very concerned about the ongoing and future investment by U.S. and other foreign companies into China because people can’t get access in terms of travel,” he said.
“Unfortunately the COVID lockdown this year and the restrictions for the last two years are going to mean three, four, five years from now, we will see investment decline, most likely.”
While much of the world has lifted coronavirus restrictions, China has strictly limited flights into the country and insisted a zero-COVID approach is necessary to prevent the country’s health resources from being overwhelmed.
The restrictions are also leading foreign companies with supply chains in China to look for alternative sources to reduce disruption, Hart said.
The chamber’s report cited market access restrictions, discriminatory regulations and intrusive cybersecurity requirements as among the main concerns of U.S. businesses.
Last week the chamber released a flash survey that warned of an “exodus” of foreign staff in China due to the COVID measures and ongoing lockdowns, saying that 58% of members had decreased their revenue projections for the year.
European businesses are braced for the next wave of disruption from COVID outbreaks, with little chance of improvement likely until China increases vaccination rates, the European Chamber of Commerce in China said on Monday.