China tells foreign business groups it will help fix supply chain problems as strict lockdown measures hit factories and transport, a report says

• China’s commerce ministry told chambers of commerce that China would help ease supply chain snarls, Bloomberg reported.
• Representatives of the chambers met the commerce minister on Monday to discuss the impacts of the lockdown.
• Production and logistics have been hampered by lockdown measures, threatening supply chains.

China’s commerce ministry told representatives of foreign business groups on Monday that Beijing will help to resolve supply chain issues stemming from the country’s strict lockdowns, Bloomberg reported. 

Members of foreign chambers of commerce — including from the European, Japanese, South Korean, UK, and US chambers — met with commerce minister, Wang Wentao, to review the impact of China’s strict lockdown measures, the outlet reported on Tuesday, citing attendees of the meeting. 

China has adopted a zero-Covid approach throughout the pandemic, introducing strict lockdown measures to stamp out the virus in areas when cases have emerged. Some cities have recently been battling the highest number of cases seen since the start of the pandemic.

Outbreaks of the Omicron variant triggered a fresh set of restrictions in the commercial hub of Shanghai, resulting in the closure of some factories and delayed transport of goods to ports, threatening further disruption to the global supply chain.

During Monday’s meeting, Chinese officials said that the government would work with foreign businesses to help iron out supply chain problems, the newswire reported, citing the European Union Chamber of Commerce’s president, Joerg Wuttke, and they confirmed that China would maintain its zero-Covid approach. 

In a statement sent to Insider on Wednesday, Jens Hildebrandt, executive director of the German Chamber of Commerce in North China, said: “According to our assessment, it will take months to fix the disruptions in the supply chains. Companies are now looking more at (risk) diversification in China, so that they have different warehouses or production sites and can act accordingly. This would increase costs for companies and in the end for consumers.”

“The current policy with lockdowns leading to production stops, logistic and supply chain disruptions and restrictions on the movement of people do not only pose a short-term concern but will leave their marks on the long run,” Hildebrandt added.

The Ministry of Commerce in China could not be reached for comment. Insider has reached out to the European Chamber of Commerce for comment.

A number of manufacturers, including Tesla, are preparing to reopen their factories in Shanghai, Reuters reported on Monday, citing a “white list” of over 600 firms given priority to resume operations and restart the local economy. Sources told Reuters that Tesla will still operate a “closed loop” policy in Shanghai.

Tesla did not respond to Insider’s request for comment.