China’s stringent “zero COVID” policy of travel restrictions and city-wide lockdowns is likely to stretch into next year, and is actively discouraging American and European investment in China, the U.S. ambassador to the country said.
“My honest assumption is that we’ll see the continuation of ‘zero COVID’ probably into the beginning months of 2023 — that’s what the Chinese government is signaling,” Nicholas Burns, the American envoy in Beijing, said during an online event on Thursday.
The harsh lockdown in the commercial center and financial hub of Shanghai — where many U.S. companies have operations and base executives — has prompted many American businesspeople to leave the country, Burns said. At one point, the U.S. embassy and the Shanghai consulate had 80 consular officers working round-the-clock helping citizens “who wanted to get out, needed water and food, needed medical care,” he said.
Burns also said that it remains unclear which direction China’s increasingly “aggressive” government is going to take the country’s economy. Beijing has sent mixed messaging about whether it would continue to crack down on certain sectors, such as technology, he said.
Although the Chinese market is too important for foreign companies to leave entirely, Burns said that local chamber of commerce surveys and conversations suggest companies remain uncertain about investing further given uncertainties — particularly over COVID travel rules, Burns added.
Investment ‘hesitancy’
“We don’t see a lot of companies leaving lock, stock and barrel, but from the results that I’ve read, and the conversations had with lots of business leaders here, I think there’s a hesitancy to invest in future obligations until they can see the end of this,” he said in the event hosted by the Brookings Institution think-tank.
China’s strict approach to COVID has also constrained the number of in-person meetings that American officials can have with their Chinese counterparts, with recent high-level interactions happening only outside of China, Burns said. It’s also discouraged members of Congress from visiting, he said.
“It’s difficult to convince my colleagues in Washington to come here if I tell them that, when they do it, they have to quarantine for 14 days before they can have a single meeting,” Burns said. “I understand their unwillingness to do that.”
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