The fallout of the visa problems

Getty Images via Daylife

Access Asia's latest weekly newsletter details some of the economic problems the current visa regime is causing. After making jokes about the staff of the Chamber of Commerce, who cannot get visas since outside Beijing they are technically illegal organizations:

The real adverse effects of the visa crackdown will be felt and suffered by Chinese people and businesses. Consider the following problems we've encountered in the last couple of weeks:

A number of brands manufacturing in China need to place Xmas orders. They have policies that independent factory inspections must occur to ensure working conditions etc as part of their CSR. They don't use local inspectors given the problems with those and formula box ticking scams. However, their inspectors cannot get a visa, and so cannot approve the factory and so the contract cannot be awarded. While Beijing may think the Olympics is worth all this, the fact is that the West cannot move Xmas to late February. Even if (and there are no guarantees) things return to normal in September, it will be too late for these firms who need to get gear on boats in October for the holidays. Now many are scrambling to find capacity in Vietnam, Bangladesh, etc., while any number of Chinese garment manufacturers (two thirds of whom operate on margins of less than 1.5% already) will go under.

A number of companies with production runs already underway are having to stall or delay work as they cannot get visas for their Quality Assurance (QA) staff to enter China. Few are willing to let 500,000 leather jackets be produced without getting someone to do some QA, so delays are occurring, meaning factories will get paid late or have orders cancelled. In Hong Kong last week, Access Asia was offered US$1,000 for every referral of a qualified, experienced China-based QA person we could find as desperation sets in.

Sourcers are finding visas problematic. Canton Fair this year was a bust, and now major sourcing centres such as Yiwu and Wenzhou are empty and local traders are disgruntled as they can't get deal volume as in the past due to regular customers being denied visas.

Several language training companies we know (the sort that do specialist corporate language training so all staff can do their jobs better and remain connected with the rest of the world) cannot get visas for their trainers to travel in and run classes - contracts lost, staff not receiving training.