Yahoo Finance Live's Akiko Fujita and Rachelle Akuffo examine the latest developments surrounding China's COVID cases, as lockdowns weigh especially heavy on protesting Foxconn factory workers.
AKIKO FUJITA: Rachelle, certainly a lot of focus on what's happening over in China right now.
RACHELLE AKUFFO: Absolutely. I mean, frustrations over China's zero-COVID policy boiling over. According to Reuters, Foxconn, the world's largest Apple iPhone factory, says it's set to see its November production affected by roughly 30% and is unlikely to resume full production by the end of this month. And of course, this update comes days after factory workers clashed with security personnel.
And, Akiko, this is tough. We know that Apple was already in a tough position when it comes to delivering on its iPhone 14, and this is actually a major hub there, Zhengzhou. 70% of global iPhone shipments come from there, and that does include that new iPhone 14 line. And when you add zero-COVID on top of everything else, really a tough spot at the moment for Apple and for the country there.
AKIKO FUJITA: Yeah, no question about it. There's a reason they call Zhengzhou an iPhone city because it is really the hub for iPhone manufacturing. And we now know they have started the five-day lockdown, kicking off on Friday, over in China.
But the larger context here, Rachelle, is, you know, you get the sense that there's a bit of a repeat going on with COVID cases ticking up. In fact, when you look at the numbers from Thursday, we're talking well over 30,000. That is the highest case count, daily case count, that China has had to this date. So that gives you a sense of where things stand.
On top of that, you've got lockdowns in places like Beijing, 1,800 cases reported there. We've heard about panic buying that have been kicking off as well. So it's an interesting dynamic. Number one, we're obviously watching the economic picture to see what this means for a further slowdown that we've been seeing in China.
But the larger picture here is, what does this mean for China's COVID policy because we've seen, whether it's the protests over at the iPhone factory or in places like Beijing, that there is a lot of tension boiling up from people who are saying we've really had enough with this policy, and how does China keep all of that unrest in check when they've seen case counts tick up in such significant way?
RACHELLE AKUFFO: I mean, it's tough because we've seen that President Xi is really determined to this policy, putting the health of Chinese people ahead of the health of the Chinese economy. But you have to wonder at what point it's going to tip over. We saw that there was some enthusiasm, sort of a one step forward, two steps back when it came to some of the easing, as we saw with airline restrictions in China.
But then as we're seeing these cases mount, as you mentioned there, outdoing what we saw with the Shanghai's record of about 29,000 and approaching about 33,000 at this point and some of the first deaths in six months, and a lot of those coming in Beijing. So a lot of headwinds here. It doesn't seem to be a tipping point though. China does seem to be holding still to this COVID zero policy, even if it's costing the economy.
And obviously, if you're locked down, you're trying to plan for purchases, it affects the economy there as well because you can't plan for a new job if you have to work from home and get locked down, trying to make purchases like a car and do other things and like property. So it really is a tough spot if you're both a consumer there as opposed-- as well as some of these other countries looking perhaps for China to be this growth engine that they've been hoping for as well.
AKIKO FUJITA: Yeah, I mean, there appeared to be some expectation going into the spring that potentially there would be even more easing in these restrictions. China right now really focused on a more targeted approach. We'll have to watch to see how much longer they can take that approach given the uptick in the cases.