But as the Chinese economy grows, external relations are at an all-time low. And unless Beijing significantly eases its travel and quarantine restrictions, the damage to bilateral business, diplomatic and cultural ties will worsen, US companies and organizations targeting US-China involvement warn.
“A price of this zero-tolerance policy that I don’t think is fully understood is…” [that] the lack of people-to-people exchanges – with Chinese coming here and Americans going there – actually worsens the relationship [because] it is dehumanizing,” said Stephen A. Orlins, chairman of the National Committee on US-China Relations.
China’s zero Covid strategy relies on a rigorous system of quarantine, testing and isolating positive cases, as well as community lockdowns and travel restrictions to reduce the viral spread. That approach has been hugely successful from a public health perspective. Data from Johns Hopkins University shows China has recorded just 4,849 deaths from Covid-19, compared to 785,900 in the US
China’s Center for Disease Control released a pilot study last month that predicted that easing current Covid controls would trigger hundreds of thousands of new infections and “have a devastating impact on China’s medical system and cause major disaster in the nation.” . State media, meanwhile, is doubling down on defense of the zero Covid strategy.
There are political obligations to enforce that strict Covid control policy: President Xi Jinping wants to maintain his credibility for successful coronavirus control ahead of the 20th party congress late next year, when he is widely expected to serve an unprecedented third term as China’s leader. The construction of new massive quarantine facilities designed to accommodate thousands of overseas arrivals indicates that the current quarantine system is becoming a regular part of inbound Chinese travel.
But a possible easing of entry and quarantine restrictions was one of the results of last month’s virtual meeting between Xi and President Joe Biden. At that meeting, Xi “agreed to upgrade accelerated arrangements, which will further improve economic and trade exchanges between China and the US and boost the recovery of the two economies.”
Qin expanded Xi’s commitment by announcing Thursday that the government’s approval of terms has changed “PU Invitation Letters” would be reduced to “no more than 10 working days”. The government will also make mandatory testing and quarantine “easier” through measures including the creation of “quarantine bubbles” that allow business travelers to meet in person with China-based colleagues, staff and customers upon arrival. Details of the fast-track plan will be released soon, Qin said.
“Details are important, and we would like to know how to change the current long time in quarantine [and] what does the reference to a ‘bubble’ mean in terms of allowing the aspiring business traveler to work while protecting others?” said Douglas K. Barry, senior director of communications at the US-China Business Council.
A person familiar with the Chinese government’s plans for its “fast track” business travel plan said it targets “the factory engineer or technician who has to fly in and out”, rather than long-term resident expatriates. The plan allows companies to “move foreign workers to China and travel directly to a job site in a travel bubble,” the person said.
The first hurdle for business travelers who want to visit China in the Covid era is purchasing a PU invitation letter from the Ministry of Foreign Affairs. A lawyer who handles US-Chinese visas and wishes to remain anonymous for fear of being viewed as critical of Chinese state policies, POLITICO told POLITICO that these applications are subject to an icy bureaucratic process and are often denied. Applicants must be able to demonstrate the “urgent economic, trade, scientific, technological or humanitarian” nature of their travel plans in China to increase their chances of being approved, the lawyer said. “The application has to be reviewed by different levels of foreign affairs and it may take two to three months to go back and forth with the authorities to obtain the PU invitation letter,” he added.
Business travelers whose invitation letters have been approved must then apply for a single-entry visa and brace themselves for extended quarantine upon arrival. The quarantine duration, which varies depending on the point of arrival and final destination, ranges from 21 days in Shanghai to 28 days for travelers to Zhejiang, Anhui and Jiangsu provinces. Hong Kong requires visitors from the US to undergo 21 days of mandatory quarantine at a designated quarantine hotel, followed by 7 days of “self-checking”.
Other municipalities impose even more draconian quarantines. “In Shenyang, it’s 28 days in quarantine, then 28 days in a hotel — that’s 56 days,” said Ben Zhang, chief executive officer of Greater Pacific Industries, based in Bellevue, Washington, a manufacturer and importer of original equipment that operates on trusts Chinese suppliers. for over 25 years. “When I go to China for business, I want to talk to a few decision makers in the factories and get my projects moving. I can’t wait for 56 days to do that.”
Another US-based importer said the quarantine duration and conditions have prevented him from traveling to China to meet with his staff. The result is a breakdown in the team cohesion and corporate culture he has worked on for decades. He is making efforts to try and arrange meetings with staff in third countries to circumvent China’s quarantine restrictions.
“If I could choose the hotel and food for the quarantine, it would be a different story,” he said. “But instead you’re locked up in a hotel chosen by the government and eating food wrapped in plastic that’s cold, bland and the same every day — it’s like being in prison.”
Travel from China to the US has also been delayed to a trickle. Although the US last month relaxed Covid-related entry restrictions for travelers from China to proof of vaccination requirement, mandatory quarantine to re-enter China remains a strong deterrent, Orlins of the National Committee on US-China Relations said. And anyone looking to leave China will have to rush for scarce seats on drastically reduced flights. The country’s airline regulatory agency announced in October that international flights to and from China would remain at just 2.2 percent of pre-pandemic levels until at least April 2022. That undersupply of airline seats in light of high demand has caused ticket prices to skyrocket.
US-based companies and organizations with operations in China have coped with disruption over the past 21 months through virtual platforms, including Zoom. But its use limits candor and depth of conversation necessary for effective communication, especially between government officials, academics and business people. There are also concerns about possible electronic eavesdropping.
That was particularly problematic for NCUSCR’s second meeting of former US government cabinet officials and senior Chinese leaders to informally discuss bilateral strategic and economic issues. “You can’t build a relationship on Zoom [and] what you lose is the informal off the record [discussion] …when nobody [else] listen,” Orlins said.
Zhang says Zoom is denying the possibility of creating “guanxi,” a concept of mutually supportive social and business networks essential to business success in China. “With guanxi, you often get better payment terms, shorter lead times, better quality control and more focus on the project,” said Zhang.
Zhang has moved some of his procurement to parts of Southeast Asia with less severe quarantine restrictions.
Efforts by US business organizations to convince Chinese authorities to ease quarantine restrictions have hit a wall. The president of the US Chamber of Commerce in Hong Kong resigned last month in protest at the area’s three-week quarantine protocols. And 70 percent of members of the US Chamber of Commerce in Shanghai have reported difficulties recruiting and retaining foreign personnel due to quarantine restrictions, said Ker Gibbs, president of Amcham Shanghai.
“The quarantine is a challenge [and] we have asked [Chinese authorities] if they could consider a more limited two to three days in central quarantine, after which people could isolate themselves in a more comfortable situation at home or in another approved facility,” Gibbs said.
The long-term impact of the zero Covid strategy on China’s economy – from broken business deals to port closures and disrupted supply chains – may ultimately lead the Chinese government reconsider the policy. Although experts say it probably won’t happen until Xi safely secures his third term as leader of China later next year.
“The rest of the world is watching as their economy depends on China’s ability to sustain its global supply chains,” said Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “At what point do other countries start to ask, ‘Should I rely on other supply chains, because if? [China] going to continue this policy will i still be in the whims [of zero-tolerance lockdowns?].’”