2022 - May 31, 2022

Swiss companies see a light after Shanghai lockdown

China has announced various stimulus measures which are expected to include reductions on VAT, car taxes as well as personal and enterprise income tax combined with infrastructure projects and the doubling of loan quotas for SMEs.

– The Swiss Centers in China anticipate further progress for reopening business activities in the coming days, while international logistics are expected to remain challenging.

– Swiss companies struggle with the situation in Shanghai – but also find creative ways to keep their businesses running. Some enterprises, amongst them the turning company LX Precision, let their employees sleep and live at the facility to keep the production going.

– The premium coffee machine brand Jura, the tool manufacturer Fraisa and the chocolate manufacturer Läderach report about supply chain problems and future perspectives.

– In a recent survey by the European Chamber of Commerce in China, 78% of respondents stated that China is a less attractive investment destination as a result of its more stringent COVID‐19 restrictions.

Shanghai (May 31, 2022) – Doing business in Shanghai has never been harder than in the recent two months. “Manufacturing, retail, and hospitality companies faced and still face big challenges: on one hand their employees are in a strict lockdown. Additionally, they often lack components and materials because of a severely disrupted supply chain. Warehouses are closed, e-commerce is hampered“, reports Nicolas Musy, Delegate of the Board of Swiss Centers in China, a platform that lowers the market entry barriers into Asia for Swiss companies.

With an announced reopening for June 1st in Shanghai, the Prime Minister has held a video meeting with over 100’000 officials across the country to re-launch the economy – a positive signal also for the many Swiss nterprises in Shanghai. The measures are expected to include 6-months exemptions on personal income tax as well as on enterprise income tax, tax reduction on cars under 1.6-liter, a 1-3% VAT reduction, large-scale infrastructure projects, the doubling of loan quotas for SMEs and some local reduction of restrictions on apartment purchases. “These measures will not mean that the business activity will immediately catch up to pre-omicron levels. Many unskilled people have lost their jobs; starting salaries for university graduates are 20% lower than a year ago. But these programs will boost consumption, and the second half of 2022 can still be reasonably good”, analyzes Mr. Musy.

Read more in English, French and German.