Automakers, suppliers, China Inc. struggle as COVID cases spike

SHANGHAI — As China’s massive wave of COVID-19 infections begins its march across a country roughly the size of Europe, the ripple effect on business is accelerating.

From its original epicenter in the north, including the capital Beijing, COVID-19 infections are spreading throughout the country and cases are impeding workforces in manufacturing belts, including the Yangtze River Delta, near Shanghai.

Retail and financial services businesses have been hard hit by a shortage of staff, with automakers and other manufacturers not far behind, according to an international business organization operating in China.

“The retail and client facing sectors are in deep trouble. Obviously, they have limited staff that are available to work because of illness, so many of our large-scale retailers are not even opening their doors,” said Noah Fraser, managing director at the Canada-China Business Council.

With mass testing halted after China abruptly dropped its zero-COVID policy this month, official data no longer reliably captures new case numbers. As of Wednesday, the country has reported only 5,241 COVID-19 fatalities since the pandemic began.

Some estimates, however, predict the wave currently sweeping the country could infect up to 60 percent of China’s 1.4 billion-strong population.

“The case counts are starting to creep up outside of the big cities which, of course, means the virus is moving, and we’re going to see further disruption down the line,” Fraser said.

China has had to build makeshift fever clinics in Beijing after the first days of wider spread saw hospitals overwhelmed with infected people.

Back to work

Chinese workers with mild COVID are being told to go back to work in some cities, evidence of a complete reversal in the way the virus is being viewed as officials seek to limit the economic impact of an explosion in cases as the country reopens.

Government workers in the western metropolis of Chongqing were told to continue working if they were asymptomatic or experiencing mild COVID symptoms, authorities said over the weekend. Officials in Zhejiang, a manufacturing hub on China’s east coast, and a city in the nearby province of Anhui, also green-lit COVID-positive people working this week, according to local media reports.

With the initial case explosion appearing to ease off, Beijing is telling workers they don’t need to prove they are negative to return to the workplace, as long as they’ve done a week of home isolation.

Other businesses in China are still trying to limit spread within their factories, with crucial year-end production targets in sight. Volkswagen Group is asking COVID-free workers to work longer hours at one of its factories in southern China, with a raft of employees out sick with the virus.

SES AI Corp., which develops lithium-metal batteries for electric vehicles, is also trying to keep its manufacturing facility running in Shanghai. The plant there has around 100 staff and the majority have caught COVID, a spokeswoman said Wednesday. To keep the site running, SES is splitting workers’ shifts, with COVID-infected employees going to work on Mondays, Wednesdays and Fridays and non-infected staff working Tuesdays and Thursdays.

Companies such as Foxconn Technology Co. and carmaker Geely are keeping workers in closed loops as the COVID wave spreads. The systems see employees confined to the factory campus and tested regularly to keep the virus out.

Even before COVID-19 infections began hampering companies in China, the world’s second-largest economy was already depressed by its efforts to stamp out infections, as tight movement controls and repeated lockdowns hampered consumption and production.

China’s factory output and retail sales posted their worst readings in six months in November, prior to the lifting of the majority of COVID curbs at the start of December.

Retail sales fell 5.9 percent last month amid broad-based weakness in the services sector, while automobile production slumped 9.9 percent, swinging from an 8.6 percent gain in October.

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