Dear Members and Friends
The year 2022 has begun, and we have already experienced two seasons: spring and winter. Towards the end of the first week, temperatures were back in the usual range of the prevailing season, which is winter. It seems that 2022 gives us a glimpse of what we will experience in the next 12 months.
The Omicron variant is spreading at breakneck speed and infecting the entire globe. Even a booster vaccination cannot prevent infection, and while infections cause mostly mild symptoms, vaccinated individuals still carry the virus and can infect others.
That is bad news for China, as most of its 1,4 billion citizens are vaccinated, but with a vaccine that does not provide a high level of protection. Therefore, it is not surprising that China’s and Hong Kong’s borders are tightly guarded and drastic quarantine regulations are enforced. In the eyes of Chinese society, it is the responsibility of the government to protect the population from harm, and that includes the spread of the pandemic within China.
The upcoming Beijing Winter Olympics will be a real test of the mighty tools China has developed to keep a potential virus outbreak at bay in the Olympic village. The country has now sealed the Olympic site and created so-called bubbles. Needless to say, these measures will create an eerie feeling when the world’s best athletes compete without big crowds of spectators to cheer them on.
While the games will certainly impact the economy domestically, the projected retail sales and accommodation revenue from Olympic tourists will not materialize. The shutdown of Xian and other Chinese cities, where millions of people are trapped, have a serious impact on the economy and cause ripples around the globe. The production
facilities of Samsung and Micron, two of the world’s largest manufacturers of memory chips, are based in Xian; both companies warned that the delivery of orders would be delayed.
Yuzhou, another City in China with a population of 1 million, has also been shut down for the time being, and more cities might follow. Based on the experience of the 2020 and 2021 shutdowns, supply chains around the globe are expected to be impacted. Therefore, it is advisable to review your supply chains and inventories again to avoid surprises in your commitments to your customers.
However, there is also good news for companies operating in China. The Chinese government has communicated that the current tax exemption regime for expats will remain in place until the end of 2023. This is a real relief, as the costs for expatriates based in China would have increased significantly.
Despite the special situation last year, the Swiss-Chinese Chamber of Commerce was extremely active and we held physical events when possible. We believe that nothing can replace a good elbow bump, a wave or a face-to-face meeting. It is an exciting time to be a member of the SCCC. May this year be a year of success for your career and projects with China. The chamber will continue to be your trusted partner, providing direct support to help your business flourish and to inspire and educate your employees. We hope that commercial flights will resume soon without quarantine. If possible, we will organize a special SCCC trip to China. Given the dynamic geopolitical and business climate, it is essential to understand China’s policies and development goals in order to make timely adjustments to your business development strategies and avoid compliance risks.
We will closely monitor developments and keep our members informed through the various communication channels of the chamber. As a precautionary measure, the
Chinese New Year events have been postponed to a later date in 2022. The same applies to physical meetings. Currently, the SCCC office can be contacted by phone or video calls. Watch out for upcoming 2022 activities.
With this in mind, we wish you a healthy and successful start to 2022 and thank you for all your support.
Kind regards and stay healthy,
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