The coronavirus pandemic significantly hampers the operations of Finnish companies in China.
Nearly two-thirds of companies in Shanghai and half of companies in China as a whole estimate that their earnings will decline this year due to pandemic measures. More than a third of respondents estimate that Russia’s attack on Ukraine will worsen their outcome.
The Finnish Chambers of Commerce operating in China and the Team Finland network supported by the Ministry for Foreign Affairs surveyed the impact of the war in Ukraine and China’s severe coronary virus restrictions on the operations of Finnish companies in China.
108 companies responded to the survey. It was done in the second week of April. One third of the companies that responded to the survey were large companies with more than 250 employees.
Travel restrictions, teleworking and difficulties in the supply chain and logistics were the biggest challenges.
The problem for businesses is that pandemic measures prevent travel inside and outside China. Teleworking makes coronavirus quarantines difficult. Freight problems in both road and shipping are disrupting the distribution chain.
About a quarter of companies estimate that earnings expectations have deteriorated significantly due to China’s tough pandemic response. 27% of companies operating in China said earnings expectations were declining somewhat. Of the companies operating in the Shanghai area in particular, 40% of respondents rate the same.
57 percent of businesses across China and 63 percent of businesses in Shanghai expect investment to weaken due to the pandemic.
China’s relationship with Russia carries a risk
38 percent of Finnish companies operating in China think that Russia’s attack on Ukraine will weaken their results this year. 14 percent of companies expect a significant decline.
The main reason, according to respondents, is the political risk posed by China’s attitude towards Russia. China has not condemned Russia’s invasion of Ukraine. 57% of companies said they were doing a political risk assessment.
Traffic routes, rising costs, sourcing of materials, connection to Russian customers and payment currency are also seen as challenges.
Nearly one-fifth of respondents believed they would benefit from the coronavirus situation due to the demand caused by the pandemic.