US Companies in China Reveal Significant Negative Impact from COVID-19
Biggest Challenges Include Travel Disruptions and Reduced Staff Productivity; Long-Term Business Impact Still Unknown
The American Chamber of Commerce in China (“AmCham China”) released the results of a flash survey that measures the impact of the COVID-19 outbreak on its member companies. With over 150 companies responding to the survey, these results provide the first look at how the Chamber’s members have been affected and what government measures they would most like to see.
Read More: Auros Uses AI To Transform The Way Knowledge Is Captured, Shared, And Reused
As expected, the impact has been significant. Travel disruptions and reduced staff productivity present the most significant challenges for AmCham China member companies, while nearly one-third of respondents say they are facing increased costs and significantly reduced revenue.
There remains a delicate balancing act between containing the epidemic and restarting the economy, but the effects of delaying a return to normal operations could be costly: nearly half of respondents expect 2020 China revenue to decrease if business cannot return to usual before April 30, while close to one-fifth say 2020 revenue will decline more than 50% if the epidemic extends through the end of August.
In terms of economic outlook, nearly one-third of respondents expect a return to normal business operations by the end of March, while 12% project delays to extend through the summer. Meanwhile, more than half of respondents say it is too soon to determine the estimated cost of delays, though about 10% report they are losing at least half a million RMB per day.
Read More: Phymed Chooses Qualtrics CustomerXM
“AmCham China member companies, like much of society here, face a large number of uncertainties in combating COVID-19,” said AmCham China Chairman Greg Gilligan. “There is, in the short term, a clear and significant negative impact to member company operations, through travel disruptions, reduced staff productivity, increased costs, significant drops in revenue, and more. However, for most of our members, it is still too early to tell how significant the long-term impact will be. 43% of respondents say it is too soon to determine COVID-19’s 2020 impact on market growth, half feel it is too early to determine impact on still-planned investments, while one-quarter report plans to maintain existing investment plans.”
In other responses:
- 44% say uncertainty around the epidemic has negatively impacted their outlook regarding the US-China bilateral relationship.
- 49% of respondents hope the Chinese government will provide tax alleviation to help foreign business; additionally, more than one-third are seeking clear, consistent policies, while 35% ask that transparency be prioritized.
- More than half of respondents hope the US government will relax travel restrictions into the US, while a majority are seeking further information – both on implementation of the Phase 1 Trade Deal and COVID-19-related business policies.
- 80% of the companies say they have provided some form of assistance to China to fight the COVID-19 epidemic, and another 14% are planning to do so, with data collected so far showing that AmCham China member companies have contributed more than RMB 540 million ($77 million) in cash and in-kind donations.
Read More: DigiPlex Brings Home Gold And Silver From Corporate Content Awards
