China expands COVID-19 measures as iPhone factory disruptions fuel economic fears – National

Chinese cities on Wednesday introduced more restrictions to curb the rise in coronavirus cases, as new unrest at the world’s largest iPhone factory highlighted the social and industrial damages of China’s draconian COVID-19 measures. added to investor concerns about the economy.

In Beijing, malls and parks have closed, turning once-bustling areas of the capital into ghost towns as authorities urged people to stay home.

The Hainan island resort city of Sanya has banned people from going to restaurants and shopping malls within three days of their arrival, and many cities across China have reported the highest number of infections seen in April. A local lockdown was imposed due to the approaching

The measures darken the outlook for China, the world’s second-largest economy, and threaten China’s unusual COVID stance as it faces its first winter to battle the highly contagious Omicron variant. It dampens hopes of a significant easing soon.

Analysts at Capital Economics wrote, “While it is highly unlikely that authorities will choose to withdraw from their zero-COVID policy over the winter, there is a significant risk that containment efforts will fail.”

Such failures could lead to more lockdowns that would do unprecedented damage to the economy, they said.

China’s COVID restrictions, the toughest in the world, have fueled widespread dissatisfaction and disrupted production at manufacturers including Taiwan’s Foxconn, Apple Inc’s largest iPhone supplier.

Footage uploaded to social media on Wednesday shows Foxconn employees removing barriers, donning hazmat suits and fighting authorities, chanting, “Give us our paychecks.” Following weeks of disruption, many employees left the factory citing COVID controls. The video was not immediately confirmed by Reuters.

The region, which accounts for nearly one-fifth of China’s total GDP, is under some form of lockdown or restriction, brokerage Nomura estimated earlier this week, putting the figure above Britain’s GDP. expected.

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Despite low cases by global standards, China sticks to a zero-COVID approach, a signature policy of President Xi Jinping, officials save lives, health system overwhelmed claims to prevent

China reported 28,883 new domestic cases on Tuesday.

The International Monetary Fund has called on China to further realign its COVID-19 strategy and increase vaccination coverage.

“Zero COVID strategies have become more nimble over time, but the combination of more contagious COVID variants and persistent gaps in immunization have created the need for more frequent lockdowns, driving consumption and private investment. ,” said IMF official Gita Gopinath.

Residents have grown increasingly fed up with nearly three years of restrictions, with Wednesday’s protests at a Foxconn factory in Zhengzhou following recent crowds breaking through barriers and clashing with workers in hazmat suits in the southern city of Guangzhou. It was conducted.

The rising number of cases also tests China’s resolve to eschew blanket measures such as mass lockdowns to slow the spread of the disease, and instead rely on its recently tweaked COVID rules.

But informal lockdowns are on the rise, including homes and complexes in Beijing, where cases hit a record high on Tuesday.

In Shanghai, a city of 25 million people that went into lockdown for two months earlier this year, China’s top auto association canceled day two of the China Automotive Overseas Development Summit on Wednesday, citing COVID concerns. announced.

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

The main manufacturing hubs of Chongqing and Guangzhou have consistently high cases and account for most of China’s cases. Guangzhou’s case count fell slightly to 7,970 on Tuesday, with infections continuing to be concentrated in key areas in the Haizhu district, officials said.

Investors who hoped China eased restrictions last week are concerned that a wave of infections could delay the reopening of the economy. Many analysts say it is unlikely that COVID controls will ease significantly by March or April.

A sharper-than-expected slowdown in China, which has hit domestic demand in particular, has hit Japan, South Korea and Australia, which export hundreds of billions of dollars worth of goods and goods to China, the world’s second-largest economy. will spread to countries such as

Analysts have also lowered forecasts for oil demand from the world’s largest oil importer, and the recent COVID containment has already sent global oil futures down.

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