SHANGHAI, Nov 2 (Reuters) – Chinese electric car maker NIO has suspended production at its factory in the eastern city of Hefei as a rise in COVID-19 cases and China’s tough response to the outbreak have slammed manufacturing and The economy takes a growing toll.
The impact is also being felt in the central city of Zhengzhou, where the industrial park where Apple (AAPL.O) is home to a large iPhone factory announced new shutdowns, even as the factory’s owner Foxconn (2317.TW) scrambled to reassure frustrated workers as the outbreak continued. virus containment.
China is battling its largest outbreak since the summer as cases erupt in several major cities, forcing millions of residents to stay at home or go to centralized isolation facilities under the country’s strict zero COVID-19 policy.
Yum China, operator of the KFC and Pizza Hut chains, said Wednesday that 1,400 of its roughly 12,400 stores in the country temporarily closed or had to offer limited service in October due to COVID-19, up from 900 in September And 400 average in July and August.
“Across the country, consumers are traveling less and spending less,” the company said in its quarterly earnings report. “The COVID situation remains uncertain as regional outbreaks continue to impact our operations.”
China reported 2,755 new local cases on Tuesday, the highest level since mid-August.
Shares in NIO, China’s No. 13 electric-car maker by sales, tumbled on Wednesday after the company confirmed media reports that it had halted production at two of its factories, Hefei, after struggling to deal with restrictions imposed through October. Blockades were enforced everywhere.
“Our production base was severely affected by the pandemic in October, so deliveries to some users were delayed. For this, we deeply apologize,” NIO said in a statement on Tuesday, showing the October deliveries. The volume was down 7.5% from the previous month.
“Is there anyone more unfortunate than this?”
While China’s zero COVID-19 policy is increasingly out of touch with the rest of the world, it has vowed to stay the course amid growing public and business frustration, even with individual case lockdowns and mass testing.
More than 80 percent of major Chinese cities reported cases last month, with holiday travel and new subvariables driving the spread, according to research firm Gavekal Dragonomics.
“In some respects, the current Covid-19 situation in China is as bad as ever,” Capital Economics wrote in a note on Tuesday, adding that while there are few signs of major industrial disruptions, quarantined The risks are dampening consumer activity.
“As long as zero Covid-19 remains the national goal, there is little prospect of lasting change,” it said.
The European Union Chamber of Commerce in China told Reuters that China’s lack of a clear exit strategy meant the threat of a blockade remained and was a major source of uncertainty.
“I am currently in home quarantine for seven days, while a colleague from the European Chamber of Commerce’s Beijing office is stranded in Tianjin and, like many others at the moment, finds it almost impossible to return to the capital,” its head Joerg Wuttke told Reuters this week.
In Shanghai, the impact of the city’s Disneyland closure continued, with affected residents sharing online notifications they or those who had recently come into contact with after visiting the park.
Some on social media platforms such as Douyin and Xiaohuangshu said they were sent to quarantine hotels, while others said they were sent to poorly furnished isolation rooms built from shipping containers.
“Is there anyone more unlucky than me?” Xiaohongshu user “Sanmingliu” posted a photo of her container house.
Reuters was unable to verify the authenticity of the posts.
Shanghai said on Tuesday it had tested 439,000 people linked to the Disney resort. On Wednesday, it reported a locally transmitted case the day before.
Reporting by Brenda Goh and newsrooms in Shanghai and Beijing; Writing by Tony Munroe; Editing by Michael Perry
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