According to a joint survey by the American Chambers of Commerce in Shanghai, 54% of U.S. multinational companies in China have reduced their 2022 annual revenue projections, primarily due to the recent COVID-19 outbreak in Shanghai and Beijing. 38% said it was too early to estimate the impact.
Shanghai has been battling its largest outbreak for nearly a month, and this week most of the city was put under lockdown amid a surge in COVID-19 cases.
Responses to the survey, conducted with 167 companies operating throughout China, found that 82% of manufacturers reported slowed or reduced production due to a lack of employees, supply-related challenges, or government-ordered lockdowns.
Some manufacturers in Shanghai, particularly in the automotive industry, have resorted to operating with a "closed-loop," wherein employees remain confined to the premises to keep production lines running while outside suppliers are sealed off.
Many local companies have also disclosed how the Shanghai lockdown weighs on them, including suspended operations, stagnant sales, drying liquidity, and delayed financial disclosures.
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