Companies Battle on as Covid Cases Climb in China

Chinese authorities have ramped up moves to contain Covid outbreaks after the country announced the highest caseload since early May.

On Monday, health officials reported 5,496 new locally transmitted infections for Sunday November 6, which is the worst since May 2, when Shanghai was hit by a huge protracted lockdown.

Disruptions to the world’s second-largest economy have picked up pace across the country since the national country was held, as Omicron infections spread.

Business events have been thrown into confusion and the operations of major companies such as iPhone manufacturer Foxconn have been hit.

Taiwan-based Foxconn said late on Sunday it would implement new Covid measures at its plant in Zhengzhou, including implementing a system which would involve moving all working employees into three dormitories.

Zhengzhou, the provincial capital of Henan, reported 297 new cases for November 6, the highest in five days, as the city of nearly 13 million scrambles to contain its worst outbreak in months.

Foxconn, whose production of Apple’s iPhone 14 models at its Zhenghou plant has been affected due to its curbs, said in a statement on the WeChat account of its Zhengzhou plant that employees would be required to follow a “point-to-point” system where they can only move between their dormitory and factory area.

Eight other dormitories will only allow workers to enter, not exit. The curbs were being implemented at the request of the government, it said.

Foxconn has been working to retain staff and smooth over tensions in the factory, after workers complained about their treatment and provisions under Covid prevention measures. Many employees fled the factory, prompting Foxconn to offer generous bonuses to retain staff.

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Confusion and stock volatility

Several events in China have been cancelled or postponed amid the rising cases, but some organisers have continued to press ahead.

Some visitors to the China International Import Expo (CIIE) underway in Shanghai were barred from entering the event despite having not left the city in the past two weeks and complying with all health requirements.

One found out that she could not attend only at the entrance when lights flashed red and security guards said their records showed travel history issues.

One senior bank executive who was planning to attend the trade fair on Sunday discovered he was unable to do so as he had worked in his office one day in the preceding week where there had been a close-contact case, the banker said.

At the biannual Zhuhai Airshow in Guangdong, due to kick off on Tuesday, an aviation executive said he had been barred from entering despite having arrived three days earlier to comply with requirements as he had been in a district in Beijing that had reported cases in the past seven days.

Chinese stocks rallied last week in their biggest weekly gain in more than two years, as investors sparked a trillion-dollar rebound in the market on hopes of a reopening in the world’s second-biggest economy.

But China’s health authorities doused that speculation on Saturday by reiterating that they would persevere with their approach of clearing Covid cases as soon as they surface. However, officials have been making ongoing if modest tweaks to managing the virus.

Stocks in China were tentative on Monday and they rose in Hong Kong in early trading.

Macau heads toward business as usual

Meanwhile, authorities in Macau said the world’s biggest casino hub is on track to return to relative normality after two rounds of mass Covid-19 tests last week found no new infections.

The Chinese territory had been observing Covid safety measures without any strict lockdowns until it found an imported coronavirus case on October 26.

In a statement on its website on Sunday, it said it recorded 10 cases in the current outbreak, two of which it considered imported.

“The current round of the epidemic has been effectively controlled… Community safety of Macao has been safeguarded,” the government said.

Authorities allowed casino MGM Cotai, operated by MGM China Holdings, to reopen on November 2 after locking it down for three days with more than 1,500 people inside due to a casino dealer who had been infected with Covid.

The territory closely follows the “dynamic zero” coronavirus policy of China’s central government in Beijing which seeks to immediately curb any outbreaks.

The city has an open border with mainland China and many people live and work in neighbouring Zhuhai. People crossing the border still require testing for the virus, and all international arrivals are subject to seven days’ hotel quarantine.