SHENZHEN, China (Reuters). – European business in China is anxiously awaiting the next wave of disruption caused by COVID-19 and expect little improvement until China raises vaccination rates. This was according to the European Chamber of Commerce in China on Monday.

Shanghai plans to lift its COVID lockdown, which has been in place for more than six weeks. This has had a negative impact on China’s economy. In April, industrial output and retail sales dropped at an alarming rate, exceeding expectations.

Representatives from China’s Chambers stated that even though Shanghai’s lockdown will be lifted in the next month, the restrictions placed on overseas travel for mainland citizens as well as the possibility of Omicron flare ups continue to create uncertainty.

Bettina Schoen Behanzin, vice president of the chamber said that “the outlook is very gloomy.” The Shanghai lockdown’s erratic policies have really affected business confidence.

Many companies and individuals seriously consider China as a potential location.

China believes its zero-COVID strategy is needed to protect the country’s healthcare resources.

Jorg Wuttke is the president of the chamber. He stated that it seemed unlikely that China’s COVID issues would be solved in the second half, due to the transmissibility of Omicron.

His question was, “When China will have a large vaccination campaign and even operate a mix of vaccinations to create an atmosphere where people don’t have lockdown? Because they have some herd immunity?” “We don’t see that happening at this point.”

The announcement by the National Immigration Administration last week, that it will “strictly limit” overseas travels of Chinese citizens in order to reduce the risk of an increase in COVID-19-related cases, shocked foreign businesses as well.

Wuttke stated, “It is very ironic that while we are trying to localize our management, then the management cannot travel to our headquarters.”