China’s ‘Silicon Valley’ Tightens Rules Due to Covid Outbreak



largest in China technical Center is rushing to quell the new Covid outbreak by ordering some of the country’s largest manufacturers to operate in a “closed loop” to reduce infections, state media reported.

The city of Shenzhen, which borders Hong Kong, reported just 19 cases of Covid on Tuesday as the city’s health authority said the risk of “widespread spread is low.”

But Beijing’s unwillingness to abandon its strict zero-Covid policy has led to daily mass testing of 13 million Shenzhen residents for more than a week and the closure of at least three subway stations by Tuesday.

Leading manufacturers, including iPhone maker Foxconn, electric vehicle maker BYD, drone maker DJI and telecommunications equipment maker ZTE, are among the companies required to operate within a “closed” production system.

This will restrict the movement of employees for seven days, state-run business news website Yicai reported on Monday.

The closed-loop mode of operation includes control measures such as blocking workers inside the facility and daily nucleic acid testing.

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Bloomberg News reported on Tuesday that a government notice told companies to reduce unnecessary interaction between non-production personnel and factory floors to curb the infection.

Health officials have previously said that all cases found in Shenzhen since July 15 were infected with the highly contagious Omicron BA.2 subvariant.

While this is costly and reduces production scale, manufacturers, including Tesla’s plant south of Shanghai in the past, have opted to operate in closed loop instead of resorting to full shutdowns during localized Covid outbreaks.

Strict virus controls have jeopardized global supply chains and chilled China’s economy as growth in the second quarter was a dismal 0.4 percent, the weakest since the start of the pandemic.

On Tuesday, China reported 976 cases of coronavirus infection, with the largest outbreaks reported in the southern region of Guanxi and Gansu province in the northwest.