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Apple's largest iPhone factory, located in the city of Zhengzhou, has recently been plagued by production problems, first from the COVID-19 lockdown and then from a shortage of workers. Now, the factory is getting help from an unexpected source: the Chinese government.
Officials in central China have tapped the government's vast network of party members, civil servants and veterans to help Foxconn, an Apple iPhone assembler based in Taiwan, recruit workers. Officials called on them to "respond to the government's call and help factories resume production," according to an announcement from the county government and reports in state media.
The mobilization underscores China's concerns about the domestic economy at a time when businesses are being severely disrupted, demand is sluggish and debt is at record highs. To help keep the economy afloat, China's economy is reeling from top leader Xi Jinping's strict measures to contain the coronavirus, and authorities are turning to party-led mechanisms to keep the economy afloat.
“It’s a huge irony,” Adam Segal, an expert on China’s military and technology at the Council on Foreign Relations, said of the party’s efforts to recruit cadres to work at Foxconn. "It clearly reflects the poor state of the economy and concerns that Apple and others may move production out of China."
As the government continues to implement a strict COVID-19 eradication policy, relying on large-scale blockades, centralized isolation, and almost daily nucleic acid testing to contain infections, domestic and foreign companies operating in China are already facing difficulties. The stringent measures have prompted some foreign manufacturers with longstanding ties to China, including Apple, to look to countries such as Vietnam and India to reduce their reliance on China.
The risk of Apple's dependence on China became apparent after a case of the new coronavirus infection appeared in Zhengzhou in mid-October this year. Foxconn’s Zhengzhou factory, which produces more than half of the world’s iPhones, is in a state of lockdown: About 200,000 workers were locked in the factory area, causing widespread panic.
Some workers, who asked not to be named, described to The New York Times the food shortages and their concerns about relying solely on the factory to provide basic necessities. Hundreds of workers fled the last weekend in October, some with no plans to return.
The exodus of workers has hit Apple's supply chain, which the company said could cause delays in iPhone shipments during the holiday season. A report from global investment bank UBS said that the time customers wait for the iPhone 14 Pro and iPhone Max is estimated to be approaching "all-time highs."
In the week following the mass exodus of workers, the Chinese government was quick to act.
According to the official Shanghai Securities News, a township government in Zhoukou city in eastern Henan held a meeting on Foxconn's recruitment problems and assigned job quotas to cadres. A Zhoukou city official reached by The Times acknowledged that the city was helping Foxconn recruit workers, but declined to provide details.
