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Lockdown in Shenzhen: Not everything stands still. About loopholes and wild speculations

You read it again and again that the Corona lockdown imposed on Shenzhen has forced the entire production to come to a standstill. Is it all just sweeping scaremongering, or do we need to take a more differentiated view? Foxconn would no longer produce iPhonses, graphics cards, motherboards and powerbanks would become scarce and prices would shoot up again. This sounds martial, spreads panic and some people suspect a well-calculated action of the Chinese government behind this measure.

I don’t want to dwell on the rumors that the sanctions finger is being pointed at the West, and above all at the USA, by means of an artificial shortage; that is certainly far-fetched. Of course, this is not entirely inconvenient for some people, but it is likely to be wrong. In turn, you simply have to see the bone mills, where at companies like Foxconn over 15,000 assembly line workers per shift first stand together on the assembly line and then still have to be transported tightly crammed together through the area at shift change.

Here, further aggravation of contagions and longer-term failures would also have immense implications for the whole existence of such bone mills, which can only exist through the sheer mass of wage earners. This is because even the normal annual supply of needed migrant workers is now already severely disrupted, as can be seen in the post-CNY period, when new contracts are usually signed to compensate for the departures in the columns. Many workers, especially young ones, leave the factories after the first year, either to study, to return to their parents’ farms, or simply to improve their income on other companies.

I have been able to speak with acquaintances in Shenzhen and also with companies that operate major plants there (including MSI, Galax, Palit, various PCB and component manufacturers). Based on Corona’s experience to date, the administration and development departments of such companies already work from home offices wherever possible. In addition, many companies have accommodation for their contract employees on their own premises or have accommodated the engineering staff in the office wing. This is seen as a closed unit, and it therefore continues to be produced in many places where such opportunities exist. Smart instead of helpless.

The real problem, therefore, is not the (non-) standstill of production, but the complete isolation from the outside world and the associated disruption of supply chains. Thus, no components or raw materials are supplied that are not produced within Shenzhen. The shipping of finished products is also complete, which looks and acts like a shortage to the outside world (prices), but in reality it is not at all. At least not in the conventional sense, because the things are picked up at some point.

Therefore, I would not panic at the moment and wait. China is still (at least officially) staying out of the conflict between Russia and Ukraine and is waiting to see what geostrategic advantage it could draw from the situation, which is changing almost by the hour. And that is precisely why I consider the speculation about a deliberate influence on the market to be rather inaccurate. Because as a pure export nation and workbench, China has much more to lose than its reputation: money.


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1,599 Kommentare 7,677 Likes

Man liest es ja gerade immer wieder, dass der über Shenzhen verhängte Corona-Lockdown die gesamte Produktion zum Stillstand gezwungen habe. Alles nur pauschale Panikmache oder muss man es doch differenzierter sehen? Foxconn produziere keine iPhonses mehr, Grafikkarten, Motherboards und Powerbanks werden Mangelware und die Preise werden wieder nach oben schießen. Das klingt martialisch, verbreitet Panik (read full article...)

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About the author

Igor Wallossek

Editor-in-chief and name-giver of igor'sLAB as the content successor of Tom's Hardware Germany, whose license was returned in June 2019 in order to better meet the qualitative demands of web content and challenges of new media such as YouTube with its own channel.

Computer nerd since 1983, audio freak since 1979 and pretty much open to anything with a plug or battery for over 50 years.

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