Shanghai lockdown: European firms face 'logistical nightmare', says business group

A European business group says Western companies in Shanghai are facing a "logistical nightmare" as they start to reopen after a city-wide lockdown.

The European Union Chamber of Commerce says that it expects the problems to last for several more weeks.

On Friday, Chinese officials said they will help more than 600 firms restart operations in the major financial hub.

It comes after UK and US business bodies also said their members have been hit by Covid measures in China.

Although some firms have restarted operations in Shanghai by having their employees remain on-site, "many companies still face the challenges of labour shortages and logistical difficulties," said Bettina Schoen-Behanzin, vice president of the European Union Chamber of Commerce in China and head of its Shanghai chapter.

"We estimate that less than 30% of their workforce are eligible to go to work due to the ongoing lockdowns, so there's a huge gap between policy and the reality of implementation," she added.

"The consensus is that this logistical nightmare will continue till mid-May," Ms Schoen-Behanzin said.

In recent weeks, business groups representing companies from the UK and US have also raised concerns about the impact of lockdowns in Shanghai and other Chinese cities.

Most British firms in China expect their profits to fall this year because of local Covid restrictions, a survey by the British Chamber of Commerce in China showed.

More than two-thirds of the more than 200 companies surveyed said that they expected lower revenues this year. Close to half of them said the restrictions had affected their ability to attract and retain foreign talent.

Last month, a survey of over 160 companies by the American Chamber of Commerce in China and Shanghai found that 99% of them had been affected by the pandemic.

It also showed that a third of companies had their "business operations fully stopped for two or more days due to Covid-19 control measures".

The financial, manufacturing and shipping hub of Shanghai saw a surge in Covid infections earlier this year. It was locked down by authorities for mass testing in late March.

As restrictions have been eased, Tesla has recently restarted production at its 'giga factory' in the city.

"We did lose a lot of important days of production," its chief executive Elon Musk said on Wednesday.

VW said it was evaluating the "feasibility" of resuming operations in Shanghai.

Meanwhile, Pegatron told the BBC on Wednesday that it was "waiting for further instruction from [the] local government".