How China "zero COVID" protests affect companies like Apple
- Nathan Bomey, author of Axios Closer

Illustration: Eniola Odetunde/Axios
International companies with ties to China are closely monitoring the sudden surge of protests in the country over the government's "zero COVID" stance — particularly if the unrest leads to any policy changes.
Why it matters: The restrictions have kept the pandemic in check in China for a long time — but they've also had sweeping implications for businesses, undermining domestic consumer demand and triggering production shortfalls in international supply chains.
Zoom out: Analysts say Chinese authorities are stuck in an uncomfortable spot, not wanting to back down from their position while also needing to ensure that the unrest doesn't spread.
- "The economic outlook is terrible, whatever the authorities now do," Capital Economics chief Asia economist Mark Williams wrote Monday.
The latest: Chinese state media continued to praise zero-COVID measures on Monday, signaling no change in official policy, Axios' Bethany Allen-Ebrahimian writes.
The impact: If China were to respond to the protests by easing restrictions, Apple would be among the first to benefit.
- The tech giant is reportedly facing significant supply shortages in its iPhone line due to ongoing lockdowns and labor unrest at a key manufacturing facility.
- Wedbush Securities analyst Dan Ives said Monday in a research note that "many Apple stores" have only 35% to 40% of typical inventory of the iPhone 14 Pro.
- "The zero China Covid policy has been an absolute gut punch to Apple's supply chain with the Foxconn protests in Zhengzhou a black eye for both Apple and Foxconn," Ives wrote.
The bottom line: International companies with the biggest investments in China face the most risk if the country refuses to budge, Niagara University economist Tenpao Lee tells Axios.
- "Economically there are incentives for companies to move production out of China in order to save production costs," Lee says.
- Apple, for example, has already taken steps to shift some production to India.
- "But this is a long term situation," Lee says. "It’s not going to happen in one year."
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