Workers at one of the biggest factories producing Apple iPhones are pleading for food and medical supplies as China’s zero-Covid policy causes havoc in the world’s most important manufacturing hub.
Beijing’s censors have removed viral videos circulating on Chinese social media showing workers at the Zhengzhou facility in central China asking for supplies. Two workers told the Financial Times that the factory failed to deliver food regularly to staff under quarantine.
The disruptions highlight investor concerns about supply chain risk at Apple, with more than 95 per cent of iPhones produced in China, though production remains stable for now. The company on Thursday reported that total revenues in the September quarter rose 8 per cent to $90.1bn, against forecasts of $88.9bn and compared with $83.4bn a year ago, according to Refinitiv.
Foxconn said in a statement that only “a small number of employees” had been affected and production on the Zhengzhou campus remained “relatively stable”. Apple did not respond to a request for comment.
The Zhengzhou Covid outbreak comes in a week when $550bn has been wiped off the value of the biggest US tech companies, with headlong growth stalling because of the slowing global economy and mounting cost pressures.
More Covid news: Hong Kong will allow bars and restaurants to stay open later from November 3 as it makes a cautious reopening push. (Straits Times)
Five more stories in the news
1. Russia rejects claims it intends to use nuclear weapons Vladimir Putin has denied that Russia is fuelling nuclear tensions and countered western warnings that Moscow might be planning to detonate a “dirty bomb” in Ukraine in a false flag operation, saying he saw “no point” in a nuclear strike.
Related read: President Joe Biden avoided a radical shift in the US new nuclear weapons policy that was opposed by allies in Europe and Asia.
2. US to withdraw permanent F-15 fighter force from Okinawa The US air force plans to replace its entire fleet of F-15 fighter jets based in Okinawa, Japan, with a “rotational” force. The decision has triggered alarm in some parts of the Japanese government and the Pentagon because the air force does not intend to replace them with a permanent presence in the near term, sending a dangerous signal to China, officials say.
3. China-based AIIB ramps up global development lending The Asian Infrastructure Investment Bank is sharply increasing its global lending despite the continuing suspension of its operations in Russia. AAIB president Jin Liqun told the FT that the bank planned to boost financing to “more than $10bn” in each of the three years to the end of 2025 from a total of $36bn since its founding in 2016.
4. Twitter ‘cannot become a free-for-all hellscape’, says Musk A day before his $44bn deal to buy Twitter was set to close, Elon Musk has said he does not want Twitter to become a “free-for-all hellscape”, in a sudden attempt to appease advertisers after the billionaire previously suggested that he wanted the social media platform to rely less on money from marketers.
5. Australia rides out Chinese sanctions as exports boom China’s introduction of trade sanctions on some Australian products in 2020 has resulted in unexpected benefits, with the latest economic statistics showing exports booming for the resource-rich country as it has been forced to shift its focus to other markets.
How well did you keep up with the news this week? Take our quiz.
The days ahead
BOJ interest rate decision The Bank of Japan is expected to maintain its ultra low interest rate when it announces its decision today. Prime Minister Fumio Kishida is also expected to unveil a $200bn spending plan today to ease the pain of high inflation. (Reuters)
Taiwan GDP figures Preliminary third-quarter growth statistics released today are expected to show that Taiwan’s economy grew 3.2 per cent compared with a year earlier, according to a Reuters poll of economists. However, growth has likely been heavily curbed by decreased demand for Taiwanese goods. (Reuters)
Earnings Third-quarter results will come from Airbus Group, Eni, Equinor, ExxonMobil, Glencore, NatWest, Swiss Re, Volkswagen and more on Friday.
Brazil presidential election The run-off contest between Jair Bolsonaro and Luiz Inácio Lula da Silva will be held on Sunday. In this FT Film, Brazil bureau chief Bryan Harris travels the nation to look at the enormous economic and social challenges facing the next president.
What else we’re reading and listening to
German exporters rethink €100bn ‘love affair’ with China Germany’s Mittelstand companies are increasingly realising that they cannot rely on Chinese profits as they once did, according to Jörg Wuttke, president of the influential trade lobby EU Chamber of Commerce in China. The breakdown threatens to unravel what has become one of the world’s most mutually beneficial trading relationships.
Xi consolidates his rule as economic problems mount On this episode of the Rachman Review podcast, Gideon talks to economist Linda Yueh of Oxford university to discuss what the growing centralisation in China tells us about how Xi Jinping will handle the private sector, the property crisis and international tensions over Taiwan.
The problem with social media is that it is not a real place If we want to stop the internet becoming either a desperately bland or perfectly horrible place, we need to start treating it as somewhere we would be happy spending time in real life. That includes imposing moral and social consequences for behaving like an idiot, writes Jemima Kelly.
The US Supreme Court’s business agenda The high court will soon hear cases on issues including the reach of state regulation and the question of where companies can be sued. Despite a solid 6-3 conservative majority, there is no guarantee that the justices will prove friendly to business interests, legal experts say. Here are some of the cases US businesses will be watching most closely.
From ‘moron premium’ to ‘dullness dividend’ New UK prime minister Rishi Sunak yesterday postponed his government’s highly anticipated financial statement. The delayed “Halloween Budget” will now be presented on November 17, improving the likely outlook for the country’s public finances.
Art
The golden age of AI-generated art is here — and it’s going to get weird. Artificial intelligence image-generation technology is advancing swiftly. The software’s ability to create almost any image from a few words will change human creativity, writes Tom Faber in this week’s FT Weekend cover story. Click here to receive the FT Weekend newsletter every Saturday.
Source: Economy - ft.com
