Advocacy │ MOFCOM consults BritCham and other foreign chambers on Covid-19’s impact on international business

Dear Members,

The lockdown situation in Shanghai continues to develop, with both ups and downs. As outlined in Ray’s letter last week, BritCham Shanghai is open and available to provide support and guidance to members. Our Advocacy team will continue to provide updates and seek opportunities to put members’ concerns and recommendations forward to the Chinese authorities in a bid to make a return to business and life as usual as smooth and safe a process as possible.

On this topic, we wanted to give you an update on the meeting held on Monday by the Ministry of Commerce in Beijing with a select group of international chambers of commerce. The meeting was called on short notice to discuss business sentiment to the current Covid restrictions and possible avenues out of the ongoing disruption. Unfortunately, the Shanghai team could not attend in-person or remotely due to the format of the meeting. We are therefore highly appreciative of the British Chamber in Beijing for attending on behalf of the wider British business community and also relaying points on behalf of Shanghai members, based on specific feedback from many of you through the recent Covid survey (which should be released later today) and other channels.

Below are some key points coming out of the meeting:

Unique collaboration: The two-hour meeting was conducted with a sense of cooperation different to many past meetings with government ministries, which have often followed a more formal structure with less desire to hear from foreign stakeholders. Minister Wang Wentao, who led on behalf of the Chinese government, seemed genuinely receptive to foreign businesses’ views.
Attendees: Foreign chambers in attendance were the British, American, Japanese, Korean and German chambers of commerce, together with the European Union Chamber of Commerce in China. Director-Generals and Deputy Director-Generals for each of these markets attended on behalf of MOFCOM, showing the importance attached to the meeting by the Chinese government.
Format: Following an opening address by Minister Wang, each chamber spoke for about 10 minutes to raise issues and recommendations to MOFCOM. Themes over a one and half hour sharing were broadly similar, with MOFCOM ready to address points after all chambers had spoken (see below).
Sources of UK views: BritCham Beijing sought to raise a number of key issues that are evident from (a) initial analysis of members’ views compiled for the 4 British Chambers’ Position Paper due to be published next month – Covid restrictions, talent development and regulatory challenges, being key issues even if unsurprising examples; (b) data from December’s nationwide Sentiment Survey of UK businesses in China, (c) the forthcoming Covid survey’s main findings, and (d) fresh data from UK international schools given that regulatory impact on this sector also affects ex-pat families outside the education business itself.
Key UK messages: Particularly pressing concerns communicated on behalf of UK stakeholders included (a) disruptions to supply-chains / logistics and business operations more generally due to Covid (specifically port congestion in Shanghai and elsewhere, frequent highway checks, and lorry-driver availability); (b) impact of uncertainty on investment strategies and timelines; and (c) the increasing strain on hiring and retaining international talent (and bringing in their loved ones).
MOFCOM feedback: Summarising the messages from the different chambers, MOFCOM focused on 5 topics and stated that the ministry would try to address all of them through its policies where possible to do so: (1) logistics and supply chains (continuing issues around the Yangzte Delta having been noted); (2) flow of people in and out of China (the UK, Germany and EU chambers all requesting that PU letter requirements be scrapped); (3) direct flights (while noted by MOFCOM, the ministry gave no commitments on changes to the current restrictions on UK flights); (4) closing of operations and wider lockdown restrictions (MOFCOM gave assurances that home quarantine and no family separations were priority items to be addressed; helping foreign residents with English language apps (that function properly) and hotlines was discussed; and whitelists of batches of companies to reopen would be published, as has started to happen in Shanghai for mainly heavy manufacturing businesses); (5) future strategies for dealing with Covid (vaccine availability and Covid control versus re-opening the economy – see below).
Balance required: On this last point, MOFCOM emphasised that dealing effectively with Covid must be the short-term objective of the Chinese government – the life, health and wellbeing of the population are key; and while continuing to reform and open-up the economy remains a long-term objective, this must take a backseat for the present time behind the broader social interests of people in general. As such, maintaining the Zero-Covid policy is a certainty even if that means temporary lockdowns must continue in Shanghai and elsewhere to eradicate the virus from within China’s borders.
Other topics: The chambers urged MOFCOM to use them as a channel of communication with international businesses. Wider geopolitical issues were not discussed.

BritCham Shanghai would again like to thank our colleagues in Beijing for raising issues on behalf of Shanghai members. We are also grateful to our members for all issues and questions raised in support of our Advocacy efforts, as well as the continuing Community contribution to the UK business community that the Consulate and other stakeholders give.

We wish you, your colleagues, families and friends good health and as speedy an end to localised lockdowns as soon as possible. Please reach out to the British Chamber Shanghai and its Executive Committee should you need any assistance or guidance.