China’s ‘closed-loop’ system is designed to keep the world’s factories running during the coronavirus outbreak.
But the system used in the factories that make Apple devices and Tesla cars is rapidly becoming unsustainable. Supply chains are disrupted and foreign companies risk reputational damage from human rights abuses against marginalized workers.
Covid-19 cases surged again in China over the past month, returning the focus to the Xi Jinping controversy. Zero Covid Policy This entails snap lockdowns, quarantines, mass testing and meticulous contact tracing.
of closed loop system It was deployed to host athletes, officials and media during this year’s Beijing Winter Olympics. In theory, the system would isolate workers from the outside world to prevent them from contracting the virus and ensure the stability of factory production.
“I don’t know how long I can hold out [in the closed loop]The factory’s accommodation and food are terrible,” said a worker surnamed Xiao from Jiangsu province, north of Shanghai. “I am a human, not a machine.”
Following the outbreak inside the Zhengzhou factory complex of 200,000 people owned by the Apple manufacturer Foxconnstaff who complained of lack of food and medicine climbed the fence and escaped.
On Wednesday, the local government ordered a week-long lockdown in the surrounding area, threatening to further disrupt production of Apple’s iPhones.
The new strains in China’s manufacturing industry, which analysts have warned will ripple into global supply chains, come just weeks after health officials and state media highlighted and reaffirmed the zero-Covid policy.
Ma Xiaowei, a senior National Health Commission official, reiterated on Wednesday that China will “resolutely” continue to implement its Covid-free policy. The statement from Beijing’s top health authority followed rumors of pending policy changes on China’s social media.
Ernan Cui, an analyst at the Beijing research group Gavekal, noted that more than three-quarters of China’s largest cities reported new cases last month, at a record pace of more than 100 cities every day.
“As the number of severe lockdowns increases, so does the likelihood of severe disruptions to production activities and supply chains,” she said in a research report.
“With no clear end in sight to the country’s draconian containment policy, tighter lockdowns and supply-side disruptions seem inevitable in the coming months.”
Alicia García Herrero, chief Asia-Pacific economist at Natixis, warned that a closed-loop system would be “not sustainable” given the risks and potential for further disruption stemming from worker mistreatment.
“You can do it for a month, two months, or three months, but when it becomes the norm, it’s very inefficient for companies,” she said, adding that foreign companies manufacturing ” “Reputational” risks will increase more and more, he added, in China.
Most affected are China’s migrant population of over 400 million, many of whom work in manufacturing and related services far from home and family.
“Even though I live nearby, I couldn’t see my wife and kids because of the closed-loop system. I miss them,” said a 35-year-old worker from Jiangsu named Zhang. Told.
After spending most of the year living in a coop with low wages, Zhang decided to quit his job and return to his hometown before the Chinese New Year in early 2023.
Since the Omicron coronavirus variant first spread in China in late 2021, labor rights groups have highlighted numerous instances of violations and crackdowns by authorities.
There are fears that the episode at Quanta Computer’s Shanghai campus in May will be repeated. A worker was trapped indoors due to a Covid-19 case and collided with a security guard in a hazmat suit as he tried to escape. Quanta makes electronic components for Apple and Elon Musk’s Tesla.
Yaqiu Wang, senior China researcher at Human Rights Watch, said the deployment of the rigid closed-loop system was just the latest devastating blow in China’s long history of exploitation by domestic and foreign groups. .
“The company is balancing ‘how do we fulfill orders from Apple’ and ‘how do we ensure compliance with the government’s Covid policy without being penalized by the government?'” she said. “Worker rights are not what they think they are.”
Gavekal’s Cui also pointed out that official reports from Zhengzhou prior to the Foxconn outbreak showed only a handful of new cases each day.
“This disparity highlights an even more serious problem: many local governments have recently avoided reporting cases or imposing restrictions to demonstrate a positive public health situation. It’s possible,” she said.
“In doing so, more cities risk falling into the situation in Shanghai in late March, initially allowing low levels of cases to avoid disruption, but as the virus began to spiral out of control. You just realize you’re there.”
https://www.ft.com/content/cc3b4a5a-af35-41d5-beec-d2e1869ec38f China’s closed crisis: ‘I am a human, not a machine’