Now Shanghai faces an expat exodus

Strict pandemic lockdowns in Shanghai are accelerating the exodus of expats from China's premier global business hub, according to media reports.

People and electronics, Nanjing Road, Shanghai
A survey by the American Chamber of Commerce last month found that more than 80% of companies with international workforces reported that China's pandemic policies had affected their ability to attract or retain foreign staff.And a recent report by the British Chamber of Commerce in China suggested that international schools in China could see at least 40% of teachers leaving ahead of the next school year - a move that, in itself, could prompt other expat families to relocate.

China has lost about 50% of all European expats since the pandemic started

Jörg Wuttke, president of the European Union Chamber of Commerce in China, told CNN that China had lost about 50% of all European expatriates since the pandemic started. "I wouldn't be surprised if another half of (those remaining) leave," he said.The experience in Shanghai would appear to mirror that of Hong Kong, where the severity of Covid restrictions has been exacerbated by strict new security laws imposed on the former British colony by Beijing.According to official immigration data, more than 180,000 people left Hong Kong in February and March, while only about 39,000 entered.But in mainland China, the pandemic appears to be only accelerating a longer-term trend. The number of expats in Shanghai fell by more than 20% over the past decade - from 208,000 in 2011 to about 164,000 last year.The drop in numbers has been even more extreme in Beijing, where the total of foreign residents declined to 63,000 last year - a drop of about 40% since 2010.

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Shanghai: a stronger base for business in China than Hong Kong

Shanghai, however, is of vital commercial importance to China, playing host to the nation's highest concentration of foreign business activity.“Hong Kong was also once a gateway into China for foreign companies, but as China developed, Shanghai became a stronger base for business operations and over 700 foreign companies have regional headquarters in Shanghai today,” Kenneth Jarrett, senior adviser on China at global business strategy firm Albright Stonebridge Group, told Al Jazeera.“The foreign business community plays a major role. Foreign companies account for 20% of Shanghai’s employment, 50% of its R&D, and 67% of the trade value of imports and exports, per government statistics.”Bill Russo, the founder of Automobility, a consultancy focusing on China’s automotive industry, described Shanghai as “irreplaceable” for the foreign business community.“There is nowhere else in China that comes even close for foreigners in terms of a favourable business environment to operate in,” he said.

Shanghai: even the "hardiest" of expats might decide to leave because of the latest Covid strategies

The French news agency AFP reported this week that there were signs that "even the hardiest" of Shanghai's overseas community, who work in a range of sectors including tech, finance and education, might decide to leave.One long-time British resident in the city told AFP they planned to repatriate over worries that the latest lockdown marked the beginning of a "really crazy direction" in virus policies, adding, "Zero Covid is like a belief now - a really fervent belief."Jens Hildebrandt, a member of the German Chamber of Commerce's North China branch, told the agency that tight entry controls had left some multinationals struggling for months to bring in new specialists as others left. He warned that current lockdown measures "will leave their marks in the long run".CNN pointed out that driving expat departures was China's adherence to an uncompromising zero-Covid policy that relied on a combination of strict border quarantines, home lockdowns and mass testing in a bid to stamp out infections.Alex Duncan, founder of Shanghai-based marketing startup KAWO, told Al Jazeera, “There has been a huge exodus growing since Covid first began. But this (latest) lockdown forced those who’d been considering leaving for a while, to make a final decision.”

Read more news and views from David Sapsted in the Spring 2022 issue of Think Global People.

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