Like many people in Shanghai, Joyce has spent weeks at home since the last COVID-19 lockdown was imposed on March 28. has suffered from food shortages, and the compound where she lives has resorted to “group buying,” in which several individuals are responsible for obtaining as much of a particular product as possible for the community.
“A lot of people struggle with being locked up at home because they literally have no income,” she says. Group purchases “are three to four or five times more expensive than normal days, and Shanghai is not cheap.”
Faced with this plight, the central government in Beijing has made it a priority to restart Shanghai’s industrial sector. China’s Deputy Prime Minister Liu He announced this week that the government would aim to stabilize the country’s supply chain by helping 666 companies in COVID-ravaged Shanghai restart operations. Doing so as the city continues to fight China’s worst COVID outbreak since the start of the pandemic could prove to be a huge challenge – and may fail to curb the disruption that will wreak havoc on the global supply chain in the coming weeks. or months could feel.
The government announced the “white list” of Shanghai companies it would help reopen on April 15, of the approximately 50,000 operating in the area. The list includes domestic and foreign companies that provide key inputs to the supply chain, such as manufacturers of semiconductor components, auto parts and medical supplies. Tesla’s Shanghai factory has reportedly already reopened, with workers in a closed loop, but with many parts inventories still closed, it’s unclear how much of the production line is up and running.
The government may feel that it has no choice but to kick-start industrial activity, even if the situation in Shanghai is not yet fully under control. On Monday, China’s National Bureau of Statistics released economic data showing that while the economy grew 4.8 percent in the first quarter of 2022 compared to the same period in 2021, economic activity slowed in March in Shanghai and other cities. that were subject to lockdowns.
“People here have mixed feelings” about the reopenings because they see it as partly a public relations exercise, Joyce says. “Most companies will ask people to live in the factory, but how are you going to do that? People may not be allowed to go home.”
Some factories have been able to continue their operations while minimizing the risk of COVID outbreaks by working with workers who are locked in a “closed loop”, meaning they have to stay in a factory, eat there and in some cases reportedly require sleeping on the floor for days or even weeks at a time.
Many workers would need permission to leave the compound where they live and then run the risk of not being allowed to return. Some factory managers are not sure if workers will show up. One of them, at a Shanghai electronics factory, who asked not to be named because of the risk of upsetting authorities, says his factory has successfully adopted the closed-loop approach. But he worries that finding enough workers for each new shift may be difficult.
