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Chinese manufacturing recovering, but demand now a concern: EU business group

FILE PHOTO: Workers wearing face masks are seen on a production line manufacturing parts for trailers to be exported to the U.S. at a factory, as the country is hit by an outbreak of the novel coronavirus disease (COVID-19), in Taizhou, Jiangsu province, China March 28, 2020. China Daily via REUTERS

BEIJING (Reuters) - Manufacturing in China, the original epicentre of the COVID-19 pandemic, has largely recovered, but now shutdowns in the rest of the world are threatening the supply of key parts and demand, a European business group in China warned on Monday.

“On the manufacturing side, it actually has been recovering quite well, surprisingly well,” EU Chamber of Commerce President Joerg Wuttke said at an online news briefing.

“But the shutdowns in the major markets... have hit our demand story as well as the supply chain,” he added.

Some overseas orders have been scrapped as the pandemic ravages the economies of China’s trading partners, with many privately-owned exporters firing workers and warning about factory closures in the near future.

Even European companies manufacturing in China for Chinese customers are not insulated, as these customers may depend on exports to Japan, the United States or Europe, said Wuttke.

While manufacturing has been coming back, companies are vulnerable to supply chain issues potentially stopping the arrival of key parts, he said.

China’s travel restrictions - which currently stop almost all foreigners, including those holding residence visas, from entering the country - also create major problems for chamber members, said Wuttke.

“We need these people. These people were here for a reason, and the reason in most cases is these are specialists in high-tech areas.”

Reporting by Gabriel Crossley; Editing by Jan Harvey

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