So let's give it and get a sense festival from how things are on the
ground. That from a week ago.
Well, honestly, I'd just say what a what a completely unique two weeks we've just
had in China and the last few days we've just seen a complete U-turn in China's
Covid policy. I've never seen anything like this for
the last three years. We've been following a very strict, very
clear, very vocal, zero Covid policy almost overnight that seems to be
completely dumped. No longer.
We following a zero Tobin policy. So no more quarantines.
I'm back in the office. Restaurants, bars, factories all seem to
be to be reopening. Testing seems to be no longer a policy
that they're following. Scanning QR code scans of buildings,
again, completely, completely dumped. So just a very confusing situation from
a from a business perspective. It's a very optimistic perspective
because we are now seeing an end in sight.
The the exit strategy for China seems to be clear, no more Covid or Noble 0
Covid. Covid is very much here and Covid is
coming. That takes us into your report here, and
I'm wondering to the point you just made that things have changed almost
overnight. How relevant still is this report?
Stephen? Yeah, that's that's a great question.
I think so when we collected this data around a month ago.
One thing was so clear that unified business is unified.
Most foreign and domestic is Covid-19 is having an enormous negative impact on
all aspects of business, from sentiment to decision making to investment plan.
So we were saying a month ago we were clearly at a tipping point, you know,
and these are these is this sentiment was feeding into action and it is
feeding into business decisions. So action was needed.
And we've seen an outpouring of anger on the streets.
We've seen civil and social unrest due to this zero coded fatigue.
So something up to us again, and this is the zero Covid policy has given.
But what I will say is while this is optimistic and we can see we're about to
face a new challenge in 2023, I would air on the side of caution because over
it is coming and people are going to get sick.
People are going to get very singing. And people are scared of what Covid is
in China. So, again, we're about to face a very
new set of challenges in 2023 and the speed of change is rather dramatic.
One thing I will say is I'm obviously sitting here in Beijing and it seems to
be open, but 30 to 40 percent of China's still in lockdown.
You know, we're going to see inconsistencies between central policy
and local policy at a local level. So many second, third tier cities.
This is the reason why we've followed this policy because of the poor
vaccination rate, because of the health care system.
So I think we're still going to see lots of uncertainty and lots of issues
between central policy and implementation.
So it's a it's a great step in the right direction for us, but we need clarity.
So what's what's the reaction from your members?
Naturally, the collective sigh of relief from the relaxation is, but they must be
girding themselves for what happens next in terms of what you're talking about
and what you mentioned in terms of that Covid is coming soon.
What do they do as that challenge approaches?
Well, I think we've had three years to prepare.
We've had three years to learn from other countries about how they handled
over 19. Obviously, we followed a very strict
zero tolerance policy, which inevitably was was was well.
In 2020, it worked very well. In 2022, it has not worked.
And I think inevitably Covid had to come in.
The one thing I will say, it's clear from our report that 90 percent of
businesses said, you know, businesses got hardest to do.
But it's not just Covid. We're seeing longstanding market access,
business environment issues that China needs to address.
I think the Chinese authorities have got a long way to restore confidence in this
market for foreign businesses. Now, we've seen an exit strategy or
we've seen the signs of an exit strategy for 0 Covid.
But how are they going to handle these new challenges coming in 2023?
Because again, I cannot overstate. The messaging from China has always been
Covid is bad. If you get Covid, it's one of the worst
things that can happen to you again. Almost overnight, this messaging has
just completely changed. So there's a lot of confusion is a lot
of scared people here in China at the moment.
And again, we need clear clarity from the from the Chinese authorities about
how what is this exit strategy, because it seems you've just come in overnight
and quite quietly. All right,
Stephen, I would ask you then about. Well, I was going to ask you about some
of the challenges, but since you mentioned it, there has been a change of
tone to messaging. Do you acknowledge the change in
messaging that Covid is not as bad? Yes, absolutely.
And so, as I've said from the outset, three years of zero Covid means one case
lost on a whole city. You know, I'm sitting here in Beijing
and we've stopped testing, so we don't know the exact figures, but it's fairly
rampant. And again, that mindset is just such an
enormous shift for people. State media, for the last three years,
I've said how serious Covid is this week.
They've completely changed the messaging.
Covid is not that serious and it's not that badly.
You know, that is just such a monumental messaging shift.
Again, from a business perspective, gives us a bit more clarity that 2023 we
will be heading towards an exit strategy.
Actually, Stephen, you know, of course, it has over the last three years created
all sorts of, I suppose, cultural problems here as well with this having
the sort of kiss of death, if anybody has it, because we all want to get to
something else. We've had the lockdowns, etc.
But how have these rather, I suppose, tense relations between Beijing and
London played into your members is fortune.
So once again. Fortunately or unfortunately, we
actually pulsed UK Business Outlook and UK China relations during during our
sentiment survey and it was right smack bang in the middle of a Truss's
premiership and Liz Truss's resignation. We saw huge levels of negativity,
pessimism. When Liz Truss was in charge and then we
saw a shift towards neutrality and a bit more optimism once that resignation came
in. So one thing is very, very clear.
People and words matter. And British businesses need clarity.
They need more engagement lot, not less. And certainly from a UK perspective, I
would say whether we believe China is a systemic rival or we can see the
partnership and the opportunities. We need more clarity, more engagement at
all levels. And that's a government to government,
business to business and people to people.
And one thing I will say is, for the last three years, it's been very
detrimental to have that lack of people to people engagement.
These are the advocates for this relationship.
And I think with maybe the loosening of restrictions, we will get back to a
stage where the UK and China can engage together, maybe in a room.