More U.S. companies in China cut forecasts, scale back investments as Covid persists

cnbc.com:

BEIJING — More U.S. businesses in China are cutting revenue expectations and plans for future investment as Covid controls drag on, a new survey found.

Between late March and late April, the share of respondents reporting an impact from Covid restrictions rose by 4 percentage points to 58%, according to an American Chamber of Commerce in China survey released Monday.

While that's not a large increase, 4 or 5 percentage points every month could be «very significant» if Covid controls persist for another five months, Michael Hart, AmCham president, told CNBC in a phone interview.

Asked what impact Covid restrictions will have if they last for the next year, more than 70% of respondents said their revenue or profit would be cut.

The latest study, conducted from April 29 to May 5, covered 121 companies with operations in China. That time period included the latest Covid restrictions in the capital city of Beijing.

The prior survey was conducted with AmCham Shanghai in late March, just as Shanghai's original plan for a two-part lockdown were starting. Those measures have lasted for far longer than the initial week.

In the last few days, Beijing city postponed the reopening of schools until further notice, and ordered all non-essential businesses in a major business district to close temporarily or have their staff work from home.

«There are very few aspects of the economy which seem to be functioning,» a survey respondent said in the report, which withheld the respondent's name and location. "[While] COVID-19 restrictions can be managed, what [will be increasingly difficult to] manage is lack in overall growth of the economy and what appear to be growing economic headwinds."

The prolonged Covid controls — as mainland China