China expands COVID restrictions, Apple factory unrest adds to economic worries

  • COVID restrictions increase as cases rise
  • Unrest at the iPhone factory adds to worries about the economy and underscores frustrations
  • Analysts warn of potential for wider lockdowns

BEIJING, Nov 23 (Reuters) – Chinese cities on Wednesday imposed more restrictions to curb rising coronavirus cases, adding to investor worries about the economy as fresh unrest at the country’s biggest iPhone factory world have highlighted the social and industrial toll of China’s strict COVID-19 measures.

In Beijing, shopping malls and parks were closed and once-bustling areas of the capital looked like ghost towns, with authorities urging people to stay home. Shanghai has banned recent arrivals from restaurants and other venues, and many cities have imposed localized shutdowns as infections near highs seen in April.

The measures darken the outlook for the world’s second-largest economy and dampen hopes that China will significantly ease its aberrant COVID policy anytime soon.

“While authorities are unlikely to opt out of the zero COVID policy over the winter, there is a significant risk that containment efforts will fail,” Capital Economics analysts wrote. Such a failure could lead to more lockdowns that would cause unprecedented damage to the economy, analysts added.

China’s COVID restrictions, the toughest in the world, have fueled widespread discontent and disrupted production at manufacturers including Taiwan’s Foxconn (2317.TW), Apple Inc’s biggest iPhone supplier.

On Wednesday, scenes uploaded to social media showed Foxconn workers tearing down barriers and battling with authorities in hazmat suits, chanting “give us our pay”. The unrest follows weeks of unrest which saw dozens of workers walk out of the factory over COVID checks.

Localities accounting for almost a fifth of China’s total GDP under some form of lockdown or restrictions, brokerage Nomura estimated earlier this week, a figure that would exceed the GDP of the UK economy.


Even though the number of infections is low by global standards, China has stuck to its zero COVID approach, a signature policy of President Xi Jinping that officials say saves lives and prevents the medical system from failing. be overwhelmed. As of Tuesday, there were 28,883 new locally transmitted cases, according to official data.

The International Monetary Fund has urged China to further recalibrate its COVID-19 strategy and increase vaccination rates.

“Although the zero-COVID strategy has become more agile over time, the combination of more contagious COVID variants and persistent gaps in vaccinations has led to the need for more frequent lockdowns, weighing on consumption and private investment. “said Gita Gopinath, head of the IMF.

Residents are growing increasingly fed up with nearly three years of restrictions, and Wednesday’s protest at Foxconn’s Zhengzhou factory comes weeks after crowds crashed through barriers and clashed with workers in a hazmat suit in the southern city of Guangzhou.

The rise in cases is also testing China’s resolve to avoid universal measures such as mass lockdowns to curb outbreaks, and instead rely on recently changed COVID rules.

However, unofficial closures have increased, including at residential buildings and compounds in Beijing, where the number of cases hit a new high on Tuesday.

In Shanghai, a city of 25 million that was in lockdown for two months earlier this year, China’s major auto association said on Wednesday it would cancel the second day of the China Automobile Development Summit in abroad who will be held there due to COVID concerns.

Chengdu, with 428 cases on Tuesday, became the latest city to announce mass testing.

Major manufacturing hubs Chongqing and Guangzhou have seen consistently high numbers of infections, accounting for most cases in China. Cases in Guangzhou fell slightly to 7,970 on Tuesday and authorities said infections continued to be concentrated in key areas of Haizhu district.

Investors who hoped last week that China would soon ease restrictions worried that the latest wave of infection could slow economic reopening. Read more Many analysts say a meaningful reopening is unlikely before March or April.

“The next few weeks could be the worst in China since the first weeks of the pandemic for both the economy and the health care system,” analysts at Capital Economics said.

Reporting from Beijing and Shanghai newsrooms; Written by Bernard Orr; Editing by Muralikumar Anantharaman, Miral Fahmy and Tony Munroe

Our standards: The Thomson Reuters Trust Principles.

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