European Union firms engaged in business in China are preparing for double-digit drops in revenues for the first half of 2020. Major surveys revealed that the public health crisis in China has adversely affected the productivity and profitability of foreign firms in the country.
Firms affiliated to the German Chamber of Commerce in China including 570 EU companies have responded to surveys. They indicated that they are expecting a double-digit drop on their revenues for the first half of the year.
The surveys showed that about 50 percent of these businesses were set at lowering their annual business targets due to unfavorable results in the coming months. They also indicated upcoming challenges such as changing rules and regulations in different jurisdictions in the country at different levels of government.
The changes were said to frequently change during the year and would render businesses grow wary about the market effect. The said modifications were also expected to render short notices to the firms.
Another report conducted by the British Chamber of Commerce showed that about half of 135 respondents in its surveys found that they, too, would experience revenue shortages to at least 10 percent in 2020. The said decline for each company was predicted to be at 20 percent.
According to the survey, the Chinese government needs to improve its communications and transparency with foreign firms to ensure that the The resumption of production cycles would be as efficient as possible.
According to the chairman of the German Chamber of Commerce in North China Stephan Woellenstein, China has been balancing two tasks to keep firms from public health issues' exposure and allowing it's market to recover from slow economic activities.
He added that small and medium enterprises (SMEs) would be more supported by the government until business operations would normalize in the country.
The president of the European Union Chamber of Commerce in China Jorg Wuttke added that businesses have found it nearly impossible to move goods or people from China to other locations in the world. The standardizing measures taken by the country was referred to as having encompassed the economy's recovery.
A study conducted by the American Chamber of Commerce in Beijing also showed that about a third of US companies operating in China would incur additional costs and reduced revenues as well.
The said survey was participated by 169 businesses. About 10 percent of the participants also estimated significant losses amounting to at least 500,000 yuan of 71,400 USD per day.
