The DIHK Chamber of Commerce reported that against the background of the zero tolerance policy for coronavirus in China and the possibility of introducing new restrictions, German companies doing business in China are expressing concern about the deterioration of the supply chain situation.
"So far, China's strategy to combat coronavirus has been very effective. But the new Omicron strain may force the government to reconsider its zero tolerance policy for coronavirus, especially against the background of the upcoming travel season of citizens around the country," said Jens Hildebrandt, a member of the executive board of DIHK in China.
Earlier, the International Monetary Fund (IMF) called on China to reconsider its policy on coronavirus, given the spread of the Omicron variant. The IMF noted that the current strategy, which allows for the isolation of entire cities with millions of inhabitants, is becoming a heavy burden for the domestic and global economy.
However, Hildebrand said that the Chinese government will probably remain committed to its coronavirus policy, since local vaccines are not as effective against the Omicron strain as vaccines from Western countries.
The industry association BDI also warned that in case of rapid spread of the Omicron strain in China, the problem with supply chains could worsen and provoke a recession in certain sectors of German industry. The BDI said that the Olympic Games in Beijing could cause an increase in the incidence of coronavirus and cause stricter restrictions, which will create new problems for manufacturers and exporters, as well as lead to higher prices for certain products.