Key Factories Resume Operation in Shanghai Under Guidance, ‘Trailblazing Yet Arduous’ Move for Megacity

By GT staff reporters

Apr 17, 2022 11:37 PM

Nearly-empty roads during a lockdown due to Covid-19 in Shanghai. Photo: VCG

Some factories in Shanghai, from automakers and biomedicine firms to chip manufacturers, are calling back staff to restore production and have formulated their own epidemic prevention plans alongside a guideline unveiled by local authorities on Saturday to push businesses back on track with caution, while maintaining the dynamic zero-COVID policy in the megacity which plays a critical role in the Chinese and global supply chain.  

The guideline, which comes as Shanghai still sees raging Omicron cases with a yet-to-arrive inflection point, is viewed by many observers as a trailblazing yet arduous pursuit to explore and redefine the delicate balance between epidemic control and economic activities. 

If the metropolis of 25 million residents can figure out ways to minimize the economic impact of anti-epidemic measures, the experience may apply to other cities across the country and will be of great significance to China's overall epidemic control and economic development in the future, they said.

Such tentative moves, together with China's firm resolve and coordinated efforts in the battle against the highly transmissible variant under the central government's leadership, constitute the precise and targeted measure that is in stark contrast to the US-style response - giving up and letting lives fade away from the very beginning.

Factories restore operations 

Released by the Shanghai Municipal Commission of Economy and Informatization on Saturday, the guideline stipulates that all district governments and authorities at different levels should actively support enterprises to resume operations and guide their epidemic prevention work using a case-by-case approach.

Businesses should formulate plans for closed-loop management, where workers live on-site and are tested regularly. They should also apply for approval to restart production with COVID-19 control authorities at the district and city levels, read the document. 

China's Ministry of Industry and Information Technology has also sent a special team to Shanghai, to promote the stable production and resumption of industrial firms in the city, knowing about their difficulties and to sort out barriers and obstacles.

Industry players have applauded the moves, saying that the guideline, though lacking details and a clear timeline, leaves much room for companies to draw up their own resumption rules on a case-to-case situation, and will help them restore capacity in a faster manner.

Taiwan-based Quanta Computer which supplies parts for Apple computers and Tesla is among the first to apply for the work resumption in its manufacturing base in Songjiang district, Shanghai.

A total of 2,000 workers making vehicle parts and PC parts will be the first to resume work inside a closed-loop, said Li Guosui, a person in charge of Quanta's manufacturing site in Shanghai.

At present, the company has eight plants and more than 40,000 employees in manufacturing site in Shanghai.

According to the firm, strict pandemic preventions measures will be followed in its closed-loop management. For example, workers are required to wear masks for work and non-work activities, have antigen tests on daily basis, and dine in a canteen with a tray so they can remain isolated. 

Moreover, non-contact delivery shall be carried out for all external items entering the factory. During the handover, both parties shall wear masks throughout the whole process and the item can only enter the closed loop area after thorough disinfection.

"More than 100 workers returned to work Sunday. All us have completed a 14-day quarantine and tested negative," Tang Tang, a worker from the company who returned to work on Sunday told the Global Times. "I feel quite safe about the closed-loop management of the factory, and I am glad to get back to work," she said.

SAIC Motor, China's largest automaker, said it will trial restarting production in Shanghai from Monday. The company said it was cooperating with the government to prevent epidemics, maintain and renovate equipment, and make careful preparations for production under epidemic prevention conditions, according to a reply sent to the Global Times.

Tesla is also calling back workers in Shanghai to prepare for the initial resumption of work, according to a Bloomberg report. Tesla did not respond to an interview request from the Global Times on Sunday.

"We are discussing and consulting with industrial chain partners about a thorough anti-epidemic plan, and will submit it to local government as soon as possible, but that will take time," a Shanghai-based auto parts supplier surnamed Zhang told the Global Times on Sunday. 

But the whole industry is now anticipating explosive growth, Zhang said, saying that the industry will revive quickly as soon as virus can be effectively contained.  

Zhang pointed out logistics remain a severe problem for many factories near Shanghai and along the Yangtze River Delta, and this will block the transport of some raw materials to Shanghai, preventing production capacity from being fully restored.  

Lu Hongzhou, head of Shenzhen's anti-epidemic expert team and head of the Third People's Hospital of Shenzhen, told the Global Times when the city has been in the state of "static management" for nearly three weeks and will continue to stick with dynamic zero-case policy, Shanghai is weighing a balance between epidemic control and normal life and economic activity through these measures.

Asked if there are any risks that the city is encouraging the resumption of industrial operations when Shanghai's daily tally of new cases still remains high, Lu said daily epidemic prevention and control measures including nucleic acid testing for workers every day are key to guaranteeing no epidemic flare-up among industrial enterprises. 

"Though Omicron spreads fast and comes with mostly asymptomatic cases, as long as people who resume work and production are negative and live within a relatively closed-loop management, the epidemic risk is controllable compared to the benefits of resuming production," Lu said.

Strike a balance

The slew of expeditious solutions indicates a more sophisticated push for balancing the city's virus containment efforts and its economic functioning. It demonstrates that Shanghai has not given up the flexibility to minimize the impact of its epidemic prevention policy on its economy, though granted, errors can be found in its anti-epidemic fight.

The active exploration is in line with the central government's requirement of carrying out epidemic prevention and control measures at the minimum cost - as the essence of China's dynamic zero-COVID policy is striking a balance between epidemic control and normal life and economic activity, analysts said.

"Resuming production when infections are still high is a big challenge and a bold exploration for the city. This is also determined by the economic status of Shanghai, which occupies a very important position not only in China but also in the world," Li Chang'an, a professor of the Academy of China Open Economy Studies at the University of International Business and Economics, told the Global Times on Sunday.

Shanghai is not just China's largest financial hub, but also home to many high-tech industries. Some of the most advanced enterprises in China and the world have set up factories in the city, involving industries such as semiconductors, automaking, electronics, chemicals, batteries and pharmaceuticals. 

Li pointed out that Shanghai's trial is particularly important as the ongoing wave of Omicron is now dealing a heavy blow to China's most developed regions, from Shanghai, the Yangtze River Delta to the Pearl River Delta which may further drag down China's GDP growth.

If Shanghai overcomes the challenge, it is worth promoting to other cities. In addition, the experience accumulated in previous rounds of epidemics in Beijing, Shenzhen and other parts of the country, including the experience and lessons of refined management and precise prevention and control, can provide support for Shanghai's new trial, Li said.