One of Apple’s largest providers, Foxconn, has suspended operations in Shenzhen as China closed down the country’s technology center to contain the country’s worst COVID-19 break out in 2 years. Even as other countries reopen and shift to an endemic response method to the virus, the world’s second-largest economy is still strongly enforcing its zero-COVID policy. The lockdowns in cities like Shenzen could deliver a very considerable blow to worldwide supply chains in the coming weeks and months.
Shenzhen is the epicenter of Chinese tech giants like Tencent and Huawei. City authorities imposed a 7-day lockdown that began on Monday due to 66 positive COVID cases identified over the weekend.
Foxconn has 2 main campuses in Shenzhen. The Taiwanese business has adjusted its production line to other sites to decrease the possible effects of the interruption.
China is dealing with its worst COVID outbreak because early 2020 as cases rise throughout the country. According to the National Health Commission (NHC), China reported 2,125 local COVID-19 cases throughout 58 cities on Sunday.
Apart from those enterprises deemed critical by the Chinese Communist Party, all companies in Shenzen have suspended operations or have implemented strict work-from-home policies. All mass transit, consisting of trains and buses, have been suspended in the city, which has a population of 17.5 million. Shenzhen likewise houses among the world’s largest container ports, and any interruption there could cause problems for an already troubled global supply chain that has been showing continued signs of fatigue with common grocery items like Pringles potato chips and Lunchables sporadically unavailable in many areas.
The Yantian port in Shenzhen was forced to shut down for nearly a week last summer after positive cases were tape-recorded among dock employees. The closure developed a tremendous backlog of goods that took months to deal with and led to a spike in global freight rates. The lockdowns in Shenzen have actually likewise triggered a disturbance to the operations of divisions within car manufacturers Toyota and Volkswagon. The current lockdowns in China come only months after China closed the northwestern city of Xi’an, which affected companies like Samsung and Micron– two of the world’s most significant chipmakers.
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H/T Timcast
