China allows Foxconn, some building sites resume work in COVID-19 bubble

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China is allowing Apple Inc supplier Foxconn’s Shenzhen operations and construction sites in Shanghai to resume work on condition that their employees live and work in a bubble arrangement against COVID-19, offering some respite for firms.

Foxconn, also known as Hon Hai Precision Industry Co Ltd, is among the companies that called production halts to comply with COVID-19 strictures as China battles its largest outbreak since early 2020, fueling concern over global supply chains.

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On Wednesday, Foxconn said it was able to restart some production and operations in the southern city of Shenzhen after adopting a “closed-loop management” system.

The system used during the recent Winter Olympics in Beijing kept event personnel tightly sealed off from the public, withregular COVID-19 tests for those within.

It was largely seen as successful in preventing the spread of coronavirus at the Olympics, or in the community.

“Some operations have been able to restart and some production is being carried out,” Foxconn said in a statement, adding that the system at its Shenzhen facilities subjected employees living there to the required health measures.

“This process, which can only be done on campuses that include both employee housing and production facilities, adheres to strict industry guidelines and close-loop management policies issued by the Shenzhen government,” it added.

On Monday, authorities in the commercial hub of Shanghai, which has also imposed tough COVID curbs, said its construction projects would have to adopt a similar system to restart work.

Still, such a system is unlikely to be feasible for many companies and large-scale disruption to manufacturing is expected as China tightens curbs.

The Shenzhen Cross-border E-commerce Association, which groups about 2,800 retailers using platforms such as Amazon, said its members felt the pain of supply disruptions.

“There will be some short-term impact on cross-border platforms like Amazon, because we can’t sell right now, otherwise buyers will suffer ... as the goods won’t be delivered efficiently,” said association chief Wang Xin.

Logistics, warehouses and port operations were disrupted by the curbs, she added.

Read more: China’s COVID-19 lockdowns could threaten half of economy, affect growth prospects

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