Foreign firms struggle to resume operations in virus-hit China

19 February, 2020 12:00 AM printer

BEIJING: Foreign firms are struggling to resume work in virus-hit China as they face disrupted supply chains, rising inventory and quarantine rules meant to contain the deadly epidemic, the EU chamber of commerce said Tuesday.

With many pharmaceutical companies globally sourcing from China, pharmacies may also face a shortage of antibiotics and other drugs if the epidemic is not resolved soon, said Joerg Wuttke, president of the European Union Chamber of Commerce in China, reports AFP.

Firms in China have seen a slow restart to work after the Spring Festival break in late January, with residents encouraged to stay home to reduce the spread of a virus that has killed nearly 1,900 people.

“The whole process is stuttering to get back as the magnitude of the challenges is just huge,” Wuttke added.

“How long this is going to last is anybody’s guess.” Many cities have imposed travel restrictions too, with about 56 million people in the hard-hit Hubei province virtually sealed off from the rest of the country.

Wuhan, a city in Hubei and the epicentre of the outbreak, is a hub for US, European and Japanese carmakers and electronics suppliers.

More recently, Beijing now requires people arriving in the capital to go into a 14-day self-quarantine.

This makes it tough for foreign experts to come in if production plants are down, delaying their recovery, said Wuttke.

In a call between Chinese President Xi Jinping and French President Emmanuel Macron on Tuesday, Xi stressed that the epidemic’s “impact on the Chinese economy is temporary”, according to state media.

“We believe that through hard work... we will still be able to achieve the economic and social development goals and tasks that we have set out,” Xi added.

He emphasised a similar point in a call with British Prime Minister Boris Johnson.

But companies continue to face problems, including the range of permits needed to transport goods, which vary by city, region and district.

This has become a “logistical nightmare” and problems moving goods lead to rising inventory, said Wuttke.

Supply chains remain disrupted, with many firms relying on other enterprises for parts, said Paul Sives, who chairs the EU chamber’s southwest China chapter.