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European Firms Appeal To China To Relax Draconian Covid-19 Policies

China’s zero tolerance Covid-19 policy is beginning to take its toll on the country’s own financial sector, as well as the broader global economy. In fact, the spillover effects from Shanghai’s lockdowns are so detrimental, that even Germany is urging China’s communist government to relax its draconian virus containment measures to prevent a complete collapse of supply chains.

As Bloomberg points out, China’s Covid-19 containment policy is substantially deteriorating the country’s economy, as the continued increase in cases translates to reduced movement and less consumption among citizens. But, consequences from the government’s Covid Zero strategy are also spreading into Europe, prompting the European Union Chamber of Commerce in China to issue a letter to the country’s cabinet outlining the effects of subsequent disruptions to Europe’s companies.

In a letter sent to China’s State Council and Vice Premier Hu Chunhua and seen by Reuters, the European chamber’s president Jorg Wuttke urges Beijing to take example from Singapore to boost its economic growth, as the Covid-19 lockdowns have caused substantial problems for a number of companies. “Current measures taken to try and contain the recent COVID-19 outbreak in China is causing significant disruptions, extending from logistics and production all the way along the supply chain within China,” read the letter.

Wuttke cited last week’s flash survey from the German Chamber of Commerce in China within the letter. That survey showed that 51% of logistics and warehousing and a further 46% of supply chains for German companies had been either completely disrupted or severely impacted as a result of the lockdowns.

Such relaxed measures suggested in the letter include allowing quarantine at home for those with either mild or no symptoms, while also encouraging the use of mRNA vaccines and placing an emphasis on getting the entire population vaccinated.


Information for this briefing was found via the Bloomberg, Reuters, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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