Policy uncertainty along with Beijing's zero Covid approach and Chinese President Xi Jinping’s call for “common prosperity” have started to dent business sentiments in the country. The world’s second largest economy, known for its pro-business and pro-investment policy and a haven for investors until the outbreak of the Covid 19 pandemic is now fast losing steam as more and more investors are starting to feel unsure about their future.
Management and consultancy firm Gartner in a recent report revealed that a third of supply chain leaders were planning “to move at least some of their manufacturing out of China before 2023. Coronavirus-related sales slumps and supply chain disruption, as well as rising production costs, have also hastened the exodus.”
Though the trend had started in 2020 when the stringent lockdowns in China hit the global supply-chain network, companies have got more active now, an analyst said.
South China Morning Post recently said that “policy U-turns and a heavy-handed, unpredictable coronavirus control strategy are fraying the nerves of China’s business community.”
Business leaders said that the policy environment in China has dramatically changed in the last two years since the outbreak of the pandemic. Just when the country’s economy was bouncing back from Covid 19 induced lockdowns and the aftermath, Xi’s ugly face-off with Chinese icon and self-made billionaire entrepreneur Jack Ma grabbed headlines. “It did not stop there. Xi continued with crackdowns on the country’s private sector at a time when it needs nurturing and encouragement to support the economy. It came as a shock to the world,” a business captain living there told India Narrative.
Amid deepening economic crisis, Chinese Premier Li Keqiang recently addressed an unprecedented national video teleconference aimed at stabilizing the economy and boosting business sentiments. The move is clearly an indication that Beijing is slipping into a panic mode.
“But despite the thrust on the economy, the country has made it clear that it will adhere to the zero Covid policy, especially now when most other countries are adopting more pragmatic measures to deal with the pandemic,” the business leader quoted earlier said.
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