China imposes a new Covid lockdown on around an iPhone factory

China imposes a new Covid lockdown on around an iPhone factory

Image source: RTE

Chinese authorities have locked down the area surrounding the world’s largest iPhone factory after workers fled the facility to avoid Covid restrictions.

The Zhengzhou airport economic zone in central China, where Taiwanese tech giant Foxconn operates a huge plant, has entered seven days of “static management,” local officials said in a statement, using a euphemism for lockdown.

The images surfaced last week on Chinese social media and showed people leaving the Foxconn facility, which employs hundreds of thousands of workers.

Employees complained online about poor conditions and had to leave the factory on foot to avoid Covid transport curbs.

Yesterday it was reported that the company announced a large increase in bonuses to stop the exodus of workers.

All people except COVID prevention volunteers and essential workers “must not leave their residences except to receive Covid tests and emergency medical treatment” officials said, RTE reported.

They only added medical vehicles, and those delivering essential items could be on the streets.

China is the last major economy committed to a zero-Covid strategy, persisting with sudden lockdowns, mass testing and lengthy quarantines in an effort to stamp out emerging outbreaks.

But the new variations have tested the ability of local officials to extinguish outbreaks faster than they can spread, leaving much of the country living under an ever-changing patchwork of Covid curbs.

Meanwhile, Chinese electric vehicle maker NIO has suspended production at its factories in the eastern city of Hefei as rising Covid-19 cases and China’s strong response to outbreaks are increasingly taking a toll on the economy. manufacturing and the economy.

The impact has also been felt in the central city of Zhengzhou, where the industrial park that houses a huge Apple iPhone factory announced a new closure, although the plant’s owner, Foxconn, is quick to appease workers frustrated by the reduction. continuation of the virus.

China is battling its biggest outbreak since the summer as cases surge in several major cities, forcing millions of residents to stay home or go to centralized quarantine facilities under the country’s strict zero Covid-19 policy.

Yum China, operator of the KFC and Pizza Hut chains, said today that 1,400 of its approximately 12,400 stores in the country temporarily closed or had to provide limited services in October due to Covid-19, compared to 900 stores in September and 400 in September. average in July and August.

“Nationwide, consumers are travelling less and reducing expenditures. The COVID situations remain uncertain with regional outbreaks continuing to impact our operations,” the company said in its quarterly earnings report, reported RTE.

On Tuesday, China reported 2,755 new local cases, the highest number since mid-August.

Shares in Nio, China’s 13th largest electric vehicle maker by sales, plunged today after confirming media reports that it halted production at its two factories after struggling to cope with restrictions imposed in October. which led to the blockade of various parts of Hefei.

“Our production base was severely impacted by the pandemic in October and so deliveries to a proportion of users was delayed. For this we apologise,” Nio said yesterday in a statement that showed a drop of 7.5% in October deliveries compared to the previous month, reports RTE.

Although China’s zero COVID-19 policy is increasingly at odds with the rest of the world, it has vowed to stay the course in the face of mounting public and business frustration by reacting to even a single case with lockdowns and massive testing.

According to research house Gavekal Dragonomics, more than 80% of major Chinese cities reported cases last month, with the spread fueled by holiday travel and new subvariants.

“On some measures China’s current Covid situation is about as bad as it has ever been,” Capital Economics wrote in a statement yesterday, adding that while there are few signs of major industrial disruptions, the risk of a lockdown is depressing consumer activity.

“And there’s little prospect of a lasting change as long as zero-COVID remains the national goal,” it said, reported RTE.

The European Union Chamber of Commerce in China told Reuters the lack of a clear China exit strategy from politics means the threat of lockdowns has remained ever present and is a key source of uncertainty.

“I am currently in home quarantine for seven days, while the European Chamber’s Beijing office has a colleague stuck in Tianjin who, like many others currently, is finding it near impossible to travel back to the capital,” said its boss, Joerg Wuttke told Reuters this week, according to RTE.

In Shanghai, the fallout from the closure of the city’s Disney Resort continued after a visit from a single positive Covid case, with affected residents going online to share alerts they received after they or someone they came in contact with They had recently visited the park.

While some claimed on social media platforms like Douyin and Xiaohngshu that they were sent to quarantined hotels, others said they were sent to sparsely furnished isolation rooms fashioned from shipping containers.

Reuters was unable to verify the authenticity of the posts.

Shanghai said yesterday that it has tested 439,000 people in connection with the Disney resort situation.

Today, he reported that he had found a case of local transmission the day before.

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