Shanghai Business Returns after Two Months of COVID Lockdown

June 25, 2022 – June 1st, 2022, Shanghai ended two months of total COVID-19 lockdown. Shops have reopened and people are allowed back into offices, parks and public areas. Over 25 million residents are now free to resume life and work operations as before. 

Foreign Global Companies Contemplate Leaving Shanghai 

While some local businesses are bustling with activity once again, foreign companies are taking a more cautious approach. Some are even contemplating leaving China altogether, following the frustrating total shutdown implemented by the Chinese government. Most foreign companies, including businesses from Hong Kong, Macao, and Taiwan, have been hit hard during the two-month lockdown, with total output value down by 70% from the previous year. 

To instill confidence among these multinational firms and keep their business within Shanghai, officials have been holding meetings with foreign firms and reducing a key border requirement for allowing overseas workers. 

Regular Operations Underway Post-Lockdown 

In June, 96.3% of industrial businesses in Shanghai tracked by the government resumed work, with a production rate above 70%, according to China’s Ministry of Industry and Information Technology. 

It is unclear how quickly the operations and economy of Shanghai will recover. In early May, about 31% of China’s GDP was impacted by the lockdowns. As of June 13th, the figure has dropped to 9%. 

Major Companies in Shanghai Announce Production Numbers 

• Tesla: U.S. carmaker Tesla’s Shanghai Gigafactory has returned to full production capacity. Over 40,000 vehicles have rolled off the production line since it resumed production on April 19, according to the company.  
• Laster Tech Corporation: LED automotive lighting module maker Laster Tech has restored 90% of production capacity at its Shanghai plant in China and is stepping up fulfilling its backlog of orders after lifting of Shanghai lockdown at the beginning of June. 
• Quanta Computer: Quanta Computer, reportedly a supplier for the new MacBook Air, is striving to boost production at its Shanghai manufacturing site to pre-lockdown levels, according to industry sources. 
• CHEMI-CON (WUXI) Co., Ltd.: Stated on June 17 that it has resumed normal production activities, as the logistics stalemate has been largely resolved with the lifting of the lockdown in Shanghai. 

• Apple: Key Apple suppliers Pegatron, Quanta, and Compal Electronics – which respectively assemble iPhones, MacBooks, and iPads – were among other local plants affected by Shanghai’s city-wide restrictions.
   

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SiliconExpert will continue to closely monitor China’s COVID-19 lockdowns and other COVID-19-related supply chain events to help you identify potential risks to your supply chain.  

Learn more about how SiliconExpert’s BOM Manager and supply chain risk mitigation tools can help keep your business on track!