Global Impact: Zero-Covid’s liabilities adding up after Foxconn factory disruptions hit iPhone shipments

There are no winners in China’s game of Whac-A-Mole that the government is calling “dynamic zero-Covid”, which has hammered the country’s economy and sent growth to lows not seen in decades. This has never been more apparent than when the world’s largest iPhone factory in Zhengzhou started restricting workers, spooking employees to the point of a mass exodus.

Foxconn, the world’s largest contract electronics manufacturer, has faced coronavirus-related troubles before. But this was the first time that the deep impact on Apple, the world’s largest technology company, was unmistakable. The company said it expected lower iPhone 14 Pro and 14 Pro Max shipments than previously, and Foxconn also revised down its fourth-quarter growth.

Zero-Covid is nothing new for China residents. They have been living with it for nearly three years. But the recent outbreak in central Henan province was an especially bad look. Workers at Foxconn’s premiere iPhone plant complained of terrible living conditions and a fear of falling sick because of poor medical care.

Some things have improved in the past couple of weeks, with workers saying they now have access to medicine while under quarantine. But this came after many workers left in droves.

Foxconn has scrambled to retain assembly line workers as the US enters the busiest shopping season of the year ahead of the holidays. The manufacturer offered a US$70 subsidy to try to woo some of its workers back, and it quadrupled its daily cash bonus to 400 yuan (US$56) to get people to stay.