Foxconn suspends operations in Shenzhen due to the city’s anti-epidemic blockade, global supply chain is more tense
CNN reported, Foxconn – one of Apple’s largest suppliers has suspended its operations in Shenzhen when the Chinese government blocked this technology center and a series of other areas to combat the Covid epidemic. -19.
The world’s second largest economy is still fiercely pursuing the Zero Covid policy as other countries begin to open up and try to live with the epidemic. The blockade of some major Chinese cities will affect not only China’s own post-pandemic recovery but also the global supply chain.
Shenzhen is already home to tech giants like Tencent and Huawei. The city is currently undergoing a 1-week blockade starting from Monday after detecting 66 positive cases on Saturday.
In a press release sent to CNN on Monday, Foxconn said that “the date for the resumption of factory operations will depend on the local authorities”.
Foxconn has two main centers in Shenzhen. The company said it has moved production to other locations to “minimize the impact”.
China is currently dealing with its worst outbreak since Wuhan in 2020. On Sunday, the country reported 2,125 positive cases in 58 cities across the country.
In Shenzhen, all business operations – except for some essential services are suspended or a work-from-home policy is applied.
Public transport, including trains and buses, was suspended in the city of 17.5 million people.
Shenzhen is already one of the world’s largest port cities, and any disruption could put severe pressure on the supply chain. Last summer, the port of Yantian here was forced to close for nearly a week after detecting cases that caused a backlog of goods that took months to clear and caused freight rates globally to skyrocket.
Shares of a series of Shenzhen-based companies fell slightly on the Hong Kong Stock Exchange.
Shanghai, China’s largest business hub, has also adopted strict measures after seeing an increase in the number of Covid-19 cases. Schools and cinemas have also been closed.
The zero Covid strategy has disrupted economic activity in other Chinese cities. In January, widespread testing forced the Toyota plant and other factories in Tianjin to shut down for more than a week. Therefore, it can be seen that this approach will make it difficult for Beijing to meet its growth target in 2022 because of the increased cost of this measure, according to Nomura. Still, on Friday, the country’s top health official, Ma Xiaowei, continued to insist that strict control measures should be maintained.
Changchun, a city of about 9 million people in northeastern China, went into lockdown on Friday. People here are also tested on a large scale. Like the early days of the epidemic in Wuhan, this city and the eastern region of Qingdao also built makeshift hospitals.
Source: CNN
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