Closed-loop crisis in China: “I am a human, not a machine”
China’s “closed-loop” system was designed to keep the global factory running during coronavirus outbreaks.
But the system, used in factories making Apple devices and Tesla cars, is quickly becoming unsustainable as supply chains are stifled and foreign companies risk damaging their reputations due to human rights abuses against foreigners. marginalized workers.
Over the past month, cases of Covid-19 have erupted again in China, re-emphasizing Xi Jinping’s controversial zero Covid policy which involves instant lockdowns, quarantines, mass testing and tedious tracing. contacts.
The closed-loop system was deployed to accommodate athletes, officials and media at the Beijing Winter Olympics this year. In theory, the system protects workers from contracting the virus by separating them from the outside world, thus guaranteeing the stability of the factory’s production.
“I don’t know how long I can last [in the closed loop]. The housing and food in the factory are terrible,” said a worker named Xiao in Jiangsu, a province north of Shanghai, “I am a human being, not a machine.”
Following an outbreak inside the 200,000-person Zhengzhou factory complex owned by Apple maker Foxconn, staff who complained of shortages of food and medical supplies escaped by climbing the fences.
On Wednesday, the local government ordered a week-long lockdown of the surrounding area, threatening to further disrupt production of Apple’s iPhones.
Renewed tensions in Chinese industry, which analysts say will ripple through global supply chains, come just weeks after the zero-Covid policy was forcefully reaffirmed by health officials and the media. officials.
Ma Xiaowei, a senior National Health Commission official, reiterated on Wednesday that China would “resolutely” continue to implement the zero-Covid policy. The statement from Beijing’s top health body followed a rumor on Chinese social media that a policy change was in the works.
Ernan Cui, an analyst with Beijing research group Gavekal, pointed out that more than three-quarters of major Chinese cities reported new cases last month, at a record pace of more than 100 cities every day.
“The growing number of severe blockages also increases the likelihood of serious impediments to production activity and supply chains,” she said in a research report.
“With no clear end in sight to the country’s strict lockdown policy, tighter lockdowns and more supply-side disruptions seem inevitable in the months ahead.”
Alicia Garcia Herrero, chief economist for Asia-Pacific at Natixis, warned that the closed-loop system was “not sustainable” given the risks of worker mistreatment and the likelihood of further disruption.
“You can do it for a month, two months or three months, but once it becomes the norm it’s so inefficient for a business,” she said, adding that there would be more and more more “reputation” risks for foreign companies manufacturing in China.
Most affected are China’s migrant population of more than 400 million people, many of whom work in manufacturing and related services, far from their homes and families.
“I couldn’t see my wife and children because of the closed circuit, even though they don’t live far away. I miss them so much,” said a 35-year-old worker named Zhang in Jiangsu.
After spending most of the year living behind closed doors on a low salary, Zhang decided to quit her job and return to her hometown ahead of the Chinese Lunar New Year in early 2023.
Since the initial spread of the Omicron coronavirus variant in China in late 2021, labor rights groups have highlighted numerous instances of violations and crackdowns by authorities.
There are fears there will be repeats of the episode at the Quanta Computer campus in Shanghai in May, when workers clashed with security guards wearing hazmat suits as they tried to escape confinement due to cases of Covid-19. Quanta produces electronic components for the Tesla of Apple and Elon Musk.
Yaqiu Wang, senior China researcher at Human Rights Watch, said the rollout of the rigid closed-loop system was just the latest scourge in a long history of exploitation in China by local and foreign groups.
“The company is balancing, ‘how do I fulfill orders placed by Apple’ and ‘how do I ensure that I comply with the government’s Covid policy as long as I am not being punished by the government,'” she said. . “Workers’ rights are not what they think they are.”
Cui, from Gavekal, also noted that official reports from Zhengzhou before the Foxconn outbreak showed only a handful of new daily cases.
“This disparity highlights an even more serious problem: the likelihood that many local governments have recently avoided reporting cases or imposing restrictions in order to show a positive public health situation,” she said.
“The risk is that in doing so, more cities find themselves in the situation of Shanghai at the end of March: initially tolerating low levels of cases to avoid disruption, only to find that the virus begins to spiral out of control.”