China's factories opt for isolation bubbles to beat COVID curbs and keep running

4 minute read

Chinese flags flutter near containers stacked at the Yangshan Deep Water Port in Shanghai, China January 13, 2022. REUTERS/Aly Song/

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SHANGHAI/BEIJING, March 17 (Reuters) - To keep factory lines open in the face of COVID curbs Chinese firms are asking workers to eat, sleep and work in bubbles isolated from the wider world, sterilising premises as often as three times a day and testing for COVID daily.

Dubbed "closed-loop management", this approach has been part of China's efforts over the past two years to keep local transmission extremely low by global standards.

It was used for example at the Winter Olympics in Beijing to seal event personnel off from the public.

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It is now being touted by local Chinese authorities as a solution for companies who want to stay open as the country tackles its biggest outbreak in two years.

Many of the harshest curbs have been applied in manufacturing hubs such as Shenzhen, Dongguan and Changchun, forcing numerous factories to shut.

Apple supplier Foxconn (2317.TW) said it was able to restart some production at its campus in the southern tech hub of Shenzhen after it put such an arrangement in place.

State media outlet Securities Times said on Thursday that television maker TCL Corp (000100.SZ), chip fab Semiconductor Manufacturing International Corp (0981.HK), and Apple supplier Shenzhen Deren Electronic Co Ltd were keeping factories in affected areas open via closed loop systems.

The companies did not respond to requests for comment.

Tesla is planning a similar arrangement for its Shanghai factory, Reuters reported on Wednesday.

On Thursday, Shenzhen, which has suspended buses, subways and all non-essential economic activity in a week-long containment programme, said it will allow firms to resume work in an "orderly" manner. read more

TOUGH REQUIREMENTS

Creating such bubbles, however is not easy. Foxconn said it could only apply the bubble on campuses that included both employee housing and production facilities.

Jin Yong, a factory worker in Shenzhen, told Reuters he had not stepped out of the electronics plant where he works since late February, when they started operating a "closed-loop" system for more than 2,000 workers.

While it was slightly depressing to not be able to leave for a walk, he said he felt that it was a good approach to battle COVID.

"We have to take a COVID test every day. And every day we have to maintain a special code showing that we’ve been tested within 24 hours," he said, describing the factory site as self-sufficient with a barber shop, canteen and fruit shop. The workers live in dormitories.

Companies also need to strictly follow government guidelines for how to manage staff inside the bubble. A notice from the Dongguan city government on Tuesday said firms had to control the flow of people on their sites to prevent large groups from gathering and to stop people from dining in the canteens.

One industrial zone in Dongguan went a step further by telling firms that they needed to cap the number of workers per 100 square metres at 10 people and sterilize factory floors, elevators and canteens at least three times a day.

But few factories will be able to meet such requirements, said Shenzhen-based Renaud Anjoran, CEO of quality control firm Sofeast Ltd, estimating that only hundreds out of the tens of thousands of factories in Shenzhen would have the resources to conduct closed-loop management.

He was not optimistic, for example, for small plants like his own of about 150 workers that was asked to suspend work on Wednesday evening. He worries losses could amount to "millions of yuan" if production stops for more than two weeks.

"At least in 2020 some of the down time was during Chinese New Year, and we were forced to delay the re-opening a bit. This 2022 lockdown is much, much worse for manufacturers."

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Reporting by Josh Horwitz and Martin Pollard; Additional reporting by Yimou Lee in Taipei; editing by Brenda Goh and Jason Neely

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