Foreign businesses in China are struggling with how to deal with the repercussions of the coronavirus outbreak.
In order to determine the extent of difficulties created by the Novel Coronavirus Outbreak (COVID-19) and steps taken by various companies, a team from the American Chamber of Commerce in South China (AmCham South China) contacted by telephone 399 companies between February 10 and 16. Since many companies had not yet returned to work during the above dates, many of the corporate executives were contacted at home.
“While a majority of companies contacted believe their 2020 revenues will be impacted by the outbreak, many are working overtime to make up for production that has been delayed by the extended holiday and the fewer number of employees who have reported for work” said Dr. Harley Seyedin, President of the Chamber.
Regardless of the impact of the outbreak, 75% of the companies said they will not change their re-investment plans. Less than 2% indicate that they will change their re-investment plans while of 23% respondents are undecided.
Communication between headquarters and their subsidiaries in China seems to have improved as 97% of the respondents state that their headquarters have a good handle on the impact of the COVID-19 on their business in China and are ready to provide any assistance needed.
Some companies anticipate that depending on how long the outbreak will last, they may have to use force majeure as a legal defense or anticipate it will be used by either suppliers and/or their customers. China Council on the Promotion of International Investment (CCPIT) reported on its website that as of February 17: “China has issued more than 1,600 force majeure certificates to shield companies from legal damages arising from the novel coronavirus disease (COVID-19) outbreak.”
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The primary difficulties reported by the companies were lack of availability of protective masks, sanitizers and other sanitary products, as well as difficulties faced in restarting operations. This was mitigated in many cases through intervention by the Chamber and coordination with provincial and local authorities. The Guangdong Department of Commerce (DOFCOM) in coordination with the Chamber has established and promoted a hotline specifically for restarting difficulties which has helped many of member companies. The Chamber has also coordinated with Guangdong Foreign Affairs Office and many local governments to assist executives in need of extending their Chinese visas and to disseminate news, information and new policies to our business community.
The complete study, the Special Report on Impact of Novel Corona virus (COVID-19) Outbreak, can be downloaded here:
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