China Covid Cases Rise as Shenzhen Flareup Snares Top Firms
Authorities have ordered some of China’s biggest firms to operate within a “closed loop” system for seven days.
(Bloomberg) -- China’s Covid-19 infections rebounded, with an increase in cases in the south threatening the operations of industry giants including BYD Co. and Huawei Technologies Co.
Nationwide, cases were 868 for Monday, CCTV reported, up from 680 a day earlier. Attention is shifting to the southern manufacturing hub of Shenzhen, where 19 local cases were detected and authorities have ordered some of China’s biggest firms to operate within a “closed loop” system for seven days, raising concerns about disruptions to global supply chains.
The city government asked its 100 biggest companies, including iPhone maker Foxconn and oil producer Cnooc Ltd. to restrict operations only to employees living within a closed loop or bubble, with little to no contact with people beyond their plants or offices. Authorities also asked companies to reduce unnecessary interaction between non-manufacturing staff and factory floors to reduce infection, according to a government notice seen by Bloomberg News.
The city had also shut three subway stations as of Tuesday. Xiasha and Shawei stations in Futian district are close to the border with Hong Kong, and Hourui in Bao’an district is to the west of the city.
Read more: China Seals Off IPhone Maker, Cnooc in Shenzhen to Battle Covid
Shanghai reported 19 local cases, including three found outside quarantine areas. The financial hub will conduct two rounds of mandatory mass testing in nine of its 16 districts between Tuesday and Thursday in order to reduce outbreak risks.
The compulsory testing, which has been conducted frequently since the city emerged from a bruising two-month lockdown in early June, comes on top of a requirement for everyone in Shanghai to test every other day in order to move around freely. Residents are already required to hold a negative PCR result done within the previous 72 hours to get into public places like shopping malls, office buildings and restaurants.
The city halted operations at warehouses in Baoshan district, including those for steel products, from Tuesday for three days to contain Covid-19 cases, according to commodities research firm Mysteel.
The majority of China’s cases are centered in the hotspots of the Guangxi region in the south, which recorded 402 cases Monday, and the northwestern province of Gansu, which had 343 new infections.
The outbreak in Gansu has coincided with the peak tourist season, dealing a heavy blow to the local industry, a key source of revenue for the remote province that lies along the ancient Silk Road and is home to attractions such as the Dunhuang grottoes, the official China Business News reported.
Read more: China Asks Banks to Keep Supporting Covid-Hit Tourism Sector
Authorities have temporarily closed 186 tourist sites, almost half of the province’s attractions. Many travel agencies have suspended planned trips to Gansu, while diverting their clients to other destinations, the report said. The province received 276 million tourists in 2021 and tourism income of 184 billion yuan ($27 billion), according to the report.
Many domestic tourism companies have issued profit warnings for the first half, according to the report, with seven mainland China-listed tourism firms, including China CYTS Tours Holding Co., LiJiang YuLongTourism Co. and Tibet Tourism Co. forecasting a combined 450 million yuan in losses for the first six months of the year.
(Updates to add warehouse details in seventh paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.