With 17 million inhabitants, a huge port, gigantic factories and numerous research and development offices, Shenzhen is often described as China’s Silicon Valley. On Sunday March 13, the city closed its non-essential services in the face of an upsurge in coronavirus cases, in accordance with its “zero Covid” policy.
The local industry lockdown could impact global electronics shipments. Many manufacturers are present in Shenzhen: the world leader in drones DJI has its headquarters there, the smartphone manufacturer Oppo has several factories there. Many subcontractors are based there, such as the electronics giant Foxconn, which manufactures screens for samsung and smartphones for Apple.
Apple and Samsung affected
According to the hong kong newspaper South China Morning Post, Foxconn employs 200,000 workers in the megalopolis, living and working in two huge campuses, in the districts of Guanlan and Longhua. The Taiwanese group announced the closure of its channels, and specified that it would transfer part of the production to other factories – Foxconn has a giant production unit in Zhengzhou, in the north of the country, where it also produces iPhones.
Already in 2020, the group had to shut down its Shenzhen channels as part of a pandemic containment plan. Foxconn has not given a date for the reopening of its factories. According to Agence France-Presse (AFP), the confinement and suspension of public transport will last at least until March 20, the time to carry out three series of mass tests.
Shenzhen borders Hong Kong, which is currently experiencing a considerable epidemic peak with 27,000 daily contaminations for 7 million inhabitants. The capital of Chinese electronics is at this time much less affected than its neighbor: it counted only 60 new infections on Sunday. But the worry is palpable in the financial markets as in political circles. If it lasts, “Containment in China will have economic repercussions”warned Thierry Breton, the European commissioner for the internal market on the airwaves of France Inter.