Updated Mar 14, 2022 - Economy & Business

China's COVID lockdowns hit Apple supplier

Local residents queue up for COVID-19 nucleic acid tests on March 13, 2022 in Shenzhen, Guangdong Province of China.
Residents line up for COVID-19 tests in Shenzhen, Guangdong Province, China, on Sunday. Photo: VCG/VCG via Getty Images

Pandemic restrictions in two of China's largest cities, Shenzhen and Shanghai, imposed Sunday have forced Apple suppliers including Foxconn to suspend production, per Nikkei Asia.

Why it matters: The seven-day lockdown of the key port city and southern tech powerhouse Shenzhen and the partial lockdown of financial hub Shanghai and other Chinese cities over COVID-19 spikes will exacerbate supply chain and inflation issues, per Axios' Dan Primack.

  • Shenzhen's port will slow down and with so many goods manufactured in China, there is the double whammy of factories closing, Primack points out.
  • The city is home to the China headquarters of Huawei and a vital manufacturing facility for Foxconn — the main Chinese maker of the iPhone and other Apple products, which announced it was pausing operations due to Shenzhen's lockdown, Bloomberg notes.

Flashback: A coronavirus outbreak in Shenzhen in spring 2021 delayed port operations and caused a surge in global shipping rates that contributed to price increases for imported goods in countries including the U.S., per the New York Times.

The big picture: The Chinese government has maintained a strict "zero-COVID' policy" using lockdowns throughout the pandemic.

What's happening: Millions of people are affected by lockdowns and other restrictions in China.

  • In Shenzhen, nonessential workers must remain at home, buses and subway train services will pause, adults must have three PCR tests "in the coming days," but "pharmacies, medical institutions and express delivery services will be allowed to stay open," the NYT reports.
  • Shanghai has temporarily closed "individual schools, businesses, restaurants and malls," AFP reports.

Meanwhile, Jilin, a city in northeast China entered a partial lockdown Saturday and Yanji, near the border with North Korea, followed suit a day later, AFP notes.

Editor's note: This article has been updated to include Foxconn's announcement.

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