The largest iPhone factory is in Zhengzhou, China. And this metropolis will be quarantined from Friday to next Tuesday due to another outbreak of COVID-19 in China. Business Insider reports, citing information from local authorities. Exactly how this will affect the work of Foxconn’s iPhone assembly shop is not yet known, but obviously it will not reduce the difficulties.
In October, Zhengzhou already entered a full lockdown due to COVID-19, but Foxconn managed to avoid a shutdown at that time. But its performance still fell significantly, and even Apple itself had to admit that it might not be able to meet the plan for iPhone 14 Pro and Pro Max shipments this year – the Zhengzhou plant produces up to 85% of all iPhone 14 Pro and Pro Max of the world. The plan may now need to be adjusted further downwards.
It is known that a highly contagious variant of the Omicron strain is currently spreading in China, which the country is trying to combat with strict sanitary restrictions in line with the “zero tolerance” policy for COVID-19. China on Wednesday reported a record 31,444 confirmed infections, including asymptomatic cases.
The authorities’ harsh methods are causing resentment across the country, including in Zhengzhou, where just yesterday riots broke out at the Foxconn plant – both related to the lockdown itself and the company’s unwillingness to pay bonuses for difficult work to pay conditions. Notably, according to Bloomberg, just a few hours ago the company announced its willingness to pay the equivalent of $1,400 to those wishing to leave the company. Now it is not clear how this is compatible with the upcoming new quarantine.
As the world’s second economy suffers, a new outbreak of COVID-19 could have global negative consequences.
Earlier this month, Chinese stock markets rose on speculation that the country would ease its pandemic restrictions. However, the optimism does not seem justified, since China clearly does not have enough medical facilities in the event of a large-scale infection in the country. According to Bloomberg Intelligence, “There is no way to manage an uncontrolled wave of infections”Therefore, the need for local control of the disease, including the closure of cities and local businesses, is particularly acute. According to experts, the full opening of China’s economy will “extend beyond 2023”.
The International Monetary Fund (IMF) also called for measures to optimize the quarantine strategy to support the economy. In particular, its experts suggest increasing vaccination rates and keeping them at high levels to maintain protection. Despite the surge in infections, stock markets in Hong Kong and mainland China remain stable as of mid-Thursday.