Chinese authorities have forced some of the country’s larger tech companies to restrict operations after an outbreak of COVID-19 in southeast China.
The city government in Shenzhen, a major manufacturing hub in China, ordered its 100 largest factories to restrict operations only to those living within a closed loop or bubble, according to Bloomberg. These factories include the iPhone manufacturer Foxconn, telecommunications company Huawei Technologies, drone maker DJI, and several other companies.
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These restrictions arrive months after several Chinese cities completely shut down due to outbreaks of COVID-19. However, the companies are treating this as usual. Foxconn’s operations in Shenzhen “remained normal,” a spokesperson told Bloomberg.
This business restriction arrived months after cities such as Shanghai shut down and restricted manufacturing plants’ ability to operate in March while officials attempted to test the massive city’s population for COVID-19. Several employees were required to live in a closed loop to avoid exposure. This included Tesla employees having to live and sleep at the factory amid the attempts to continue to test the population for COVID-19.
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China has maintained a “COVID Zero” approach to its lockdowns and attempts to restrict the spread of COVID-19. This method has relied on policies promoting closed borders, quarantines, lockdowns, and mass testing. While China sent thousands of medical workers to help and test residents of Shanghai in the spring, the monthslong lockdown forced Shanghai residents to go through several food shortages. Most of the factories in Shanghai were able to resume operations by mid-June.
These lockdowns have caused several China-based companies to cut back on their outlook for the second quarter. Apple predicted that the constraints in Shanghai would cost the company between $4 billion and $8 billion in revenue.
