Shenzhen factories keep running at full capacity despite Cov
Many factories in China’s technology hub of Shenzhen are managing to run at or near full capacity while adhering to China’s rigid “dynamic zero” Covid-19 policy, offering a glimpse at how the country’s vast manufacturing machine keeps humming under the world’s strictest quarantine regime.
At BST Computer Accessory, a smartphone charging cable manufacturer in the city’s northwestern industrial district of Guangming, all 300 of its workers were kept busy on an early May workday. It was just a few weeks after Shenzhen imposed a citywide lockdown in March to battle a fresh outbreak in the city amid a much larger surge just across the border in Hong Kong.
Shenzhen’s lockdown forced the factory to suspend operations for five days, but it was just a blip in the factory’s production, according to Hu Jun, the company’s owner. Hu had applied to resume production under a “closed-loop” system that keeps workers on site in case the lockdown was extended, but it was lifted on the fifth day, before a government review of the factory’s preparedness was completed.
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“We needed to follow the government’s order, but fortunately we were able to recover quite soon,” Hu said.
While the factory has posted signs reminding workers to wear masks, some ignore the recommendation. Hu said one reason enforcement has not been strict is because medical staff conduct nucleic acid testing for workers in the industrial park every two days.
“The tests are organised by the government and free of charge,” he said.
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Activity in the industrial park suggests that nearby businesses share BST’s relative success in keeping production uninterrupted. A steady stream of cars and trucks can be seen entering and leaving compounds in the area, with some of the number plates showing they have travelled from other provinces.
Shenzhen’s approach of giving preferential treatment to industrial enterprises in its Covid-19 control policies has been widely copied across China, including Shanghai, which remains under strict lockdown as it faces the worst outbreak in the country.
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While most Shanghai residents are kept at home and few stores are open, the local government in April picked 666 enterprises, including Tesla, to resume production. It later approved another 1,188 factories to restart production.
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With all the additional requirements for testing and tracking, local authorities and factories like BST have kept the world’s second largest economy from grinding to a complete halt. The impact of China’s dynamic zero policy on industrial production is far smaller than on services and domestic consumption.
This is partly why Beijing is doubling down on the policy. It has so far helped the government walk a fine line, keeping economic activity at an acceptable level while avoiding widespread large outbreaks that the country’s healthcare system may be ill-equipped to handle.
BST’s Hu said his factory would be able to run in closed-loop mode if there is another Covid-19 outbreak. At least 200 workers can sleep in the industrial park’s dormitory area, he said.
Many factories in Shenzhen are located in walled-off compounds in industrial areas. Larger players like Foxconn Technology Group, the Taiwanese electronics giant that assembles iPhones, have their own campuses that make it even quicker to implement a closed-loop system.
The Foxconn factories in Longhua and Guanlan districts suspended operations for just a few days this year during the citywide lockdown. The two factories have been operating normally and “strictly following the anti-pandemic requirements of the government”, a Foxconn representative said.
After the lockdown was lifted, the city of 17 million adopted a new approach of mandatory testing. Shenzhen requires residents to present negative test results within 72 hours of taking subways or entering factory compounds or other public venues. Local authorities have installed thousands of stands across the city to make testing free and easily accessible.
This model, which has embedded nucleic acid testing into everyday urban life, was later adopted by other major Chinese cities such as Hangzhou and Beijing as an alternative to rigid lockdowns. In an ideal situation, repeated testing of the population can keep factories, shopping malls and restaurants operating as usual.
Last week, Shenzhen reported first-quarter gross domestic product growth of 2 per cent to reach 706.5 billion yuan (US$107 billion). This was well below national GDP growth of 4.8 per cent for the quarter. Shenzhen is targeting 6 per cent growth for the year.
A cable coating factory just a few miles away from BST in Guangming district has adopted even stricter antivirus measures. The general manager of the company, who declined to be named because he was not authorised to talk to news media, has reminded visitors to keep their masks on during factory tours and refuses to shake hands. All vehicles need to register at the gate and gain approval to enter the industrial park.
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He said he is not taking any chances because just one positive case in the compound could disrupt production. His factory was also closed during the week-long lockdown in March, and like Hu, the restrictions were lifted before his application to operate a closed-loop system was approved.
“We will be able to go straight into closed-loop mode should there be another lockdown in the future,” the manager said.
His office decor proved he had begun to prepare: a bunk bed, covered by a mosquito net, sat adjacent to his desk and a wooden tea table.