Apple, Nike, Starbucks among U.S. companies suffering from China’s COVID lockdowns

Yahoo Finance's Ines Ferré breaks down U.S. companies' exposure to China lockdowns and a survey showing that nearly 1 in 5 businesses are looking to reduce investments in the country.

Video transcript

AKIKO FUJITA: Well, travel to Shanghai today, and you'll have over 1,000 Starbucks stores to choose from. And you can even find a Dunkin' or a Blue Bottle if that's your thing. China is big business for US corporations of all stripes, but many of these slashed investments this year. Are we on the road to recovery? Yahoo Finance's Ines Ferre has the details.

INES FERRE: And Akiko, it's important to note that when we're talking about US companies and China, there are two aspects to this. The first is the Chinese consumer and the sales and services that these US companies provide to the China market.

And we have seen US companies talking about their declining sales because of the COVID lockdowns in China. For example, you had Starbucks that talked about its revenue miss because of same store sales down in China. You also have Estee Lauder, which has lowered its profit guidance. And then you've got companies like Nike also talking about its revenue down in China.

Now, on the other side of this, you have the manufacturing side of this because many US companies made big bets on China as being their main manufacturing hub. And so we saw during the pandemic, the supply chain issues. You had companies that were kind of rethinking their strategy. And now with the COVID lockdowns, those recent lockdowns have also accelerated those plans.

And I will leave you with this. And this is the American Chamber of Commerce in Shanghai's latest survey of US companies. 19% of respondents said that they were going to plan cutting their investments in China in 2022. That's up from 10% last year. And mainly one of the top reasons, or the top reason, was this zero-COVID lockdown that had been happening in China.