Japanese factories in Shanghai struggle to resume operations, survey finds

© Reuters. FILE PHOTO: A closed street during the lockdown amid the coronavirus disease (COVID-19) pandemic in Shanghai, China, May 5, 2022. Reuters/Aly Song

BEIJING (Reuters) – Japanese companies have struggled to reopen factories in Shanghai, a new survey found, suggesting pressure on the city’s government efforts to help key companies resume production amid a strict lockdown.

Of the 54 companies that responded to a survey conducted between April 27 and April 30, 63 percent said their factories had not resumed operations, the Shanghai Japan Business Club said on Thursday.

Of the 37% that have resumed operations, more than three-quarters said production was at or below 30% of normal.

According to its website, the club has more than 2,300 members.

One of the difficulties facing businesses is the government’s mandate to implement “closed-loop management” of reopenings, a process akin to a bubble-like arrangement in which workers sleep, live and work in quarantine to prevent the spread of the virus.

The club said it was especially difficult for factories without on-site dormitories, and many employees still faced movement restrictions.

“One of the conditions for obtaining a license to operate is that it needs to restrict life in the factory, but there are problems with bathing, sleeping, and eating, which cannot be tolerated,” the investigation said.

“The zero-coronavirus policy has had a negative impact on employee interactions, logistics and the ability to work,” he said.

Shanghai imposed a city-wide lockdown on April 1 at the request of the central government, sticking to a zero-tolerance policy to stamp out COVID-19 even as it battles China’s worst epidemic since the virus emerged in Wuhan at the end of the year -19 2019.

While authorities in the economic hub have said they are keen to help businesses reopen and have drawn up a priority list of nearly 2,000 businesses, chambers of commerce and businesses say onerous requirements have made reopening difficult.

The European Union Chamber of Commerce in China released the results of a survey of its members on Thursday, showing nearly a quarter of respondents were considering moving their current or planned investments outside of China, more than double the number at the beginning of the year.

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