Beijing’s zero Covid policy continues to disrupt Chinese manufacturing production.
The images are embarrassing to say the least for Taiwanese Foxconn and its major customer, Apple. Since Saturday October 29, videos have been circulating on social networks, showing employees of a Foxconn factory in Zhengzhou, China, climbing fences to escape. The factory notably assembles iPhones on behalf of Apple. However, the site was once again confined, after cases of Covid were declared (between forty and a hundred, according to the sources) in accordance with the policy pursued by Beijing since the start of the pandemic. For Chinese workers, this type of measure implies confinement at their workplace. These mega production complexes – the Foxconn factory in Zhengzhou employs between 200,000 and 300,000 people – generally include dormitories and canteens. The city has 10 million inhabitants.
Faced with the tensions, the local authorities have even proceeded to evacuate some of the workers by bus, while the management of the factory is no longer able to secure the supply of food, accommodation and working conditions. of employees, according to the Financial Times. Stories recount the solidarity of local residents with employees, the first ones depositing meals on the route of the exiles!
Drop in iPhone production
If no details have, for the moment, been given by Foxconn concerning the number of people who left the Zhengzhou factory. The impact on production capacities was calculated at “at least 10%by local analysts. However, 60% of iPhones assembled by Foxconn are in this factory. A malfunction could affect up to 30% of iPhone production over the next few months. This blockage comes at the worst time for the brand, since the last quarter is traditionally the one during which it sells the greatest number of its smartphones. Even if, given the delivery times, end-of-year sales should be little affected.
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This new crisis also reinforces the position of Apple, which seeks to reduce its dependence on “Made in China“. The Taiwanese Foxconn has also increased the iPhone production capacity of its Indian factory last summer. Finally, this crisis comes in a complex geopolitical context, while relations between China and Taiwan have deteriorated further. Beijing is happy to point the finger at the working and accommodation conditions of Foxconn employees.
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