China’s zero-Covid policy has serious consequences not only for ordinary people but also for large corporations. According to analysts, Apple will not have enough iPhones for the holiday season. And VW and Tesla are also in a bind.
The zero-Covid policy being pursued by the Chinese government is having an increasingly drastic impact. In the country itself, people are taking to the streets because they have lost their jobs and no longer want to swing from lockdown to lockdown.
Pictures from the Apple plant in Zhengzhou in Henan province went around the world: Workers there fled in droves, fearing they would be trapped inside the plant should a lockdown occur.
The pictures also showed that the people there have to live under scanty and dirty conditions. Apple employs 200,000 people at the plant, it is the largest manufacturing facility in the world.
But due to the Covid regulations, production is bumping. Analysts expect Apple won’t have enough iPhones for the holiday shopping season. 85 million devices should be produced in Zhengzhou in the last quarter, reported the “mirror”.
But now it is said to be six million fewer, which could mean a loss of at least six billion dollars. It is more expensive for the group from Cupertino, California, to have made itself dependent on Beijing.
The company and CEO Tim Cook did everything they could to accommodate the totalitarian leadership in Beijing. At the height of the Hong Kong protests in 2019, Apple, at the behest of the nomenklatura, deleted an app that protesters were using to organize themselves.
Still, the company doesn’t seem as reputable as another US company: electric car maker Tesla, run by controversial entrepreneur Elon Musk.
His Tesla plant in Shanghai is the only one that has so far been allowed to be built without a Chinese partner. Beijing usually requires a Chinese company to be involved. Observers believe this is done to siphon off important knowledge from companies.
But that’s not all: When the pandemic raged in Shanghai and the 26 million inhabitants were locked up for two months, the plant also had to be closed.
However, the authorities left no stone unturned to isolate the workers in the plant from the outside world in the future so that they do not become infected. So the factory could go back into operation.
Up to 22,000 vehicles per week currently roll off the assembly line. Due to the high level of electric car competition in China, they are sold for a bargain price of $40,000, 40 percent cheaper than in the USA.
Weeks of waiting are also unnecessary in the People’s Republic, unlike anywhere else in the world, where customers have to wait a few months to get a Tesla. But Tesla’s proximity to Beijing also has an ideological price.
In a tweet, Elon Musk suggested that people in Taiwan should consider reunification with the mainland. Ruler Xi has made it his life’s work to conquer the neighboring island democracy.
He claims the island belongs to the People’s Republic. In truth, however, the Communist Party has never ruled over the democratic country. Musk also tweeted towards Ukraine to open negotiations with Russia.
The Chinese Foreign Ministry and the Kremlin have thanked Musk.
Not only Tesla or Apple play by the rules of the dictatorship. Even German companies such as the Volkswagen Group or the chemical giant BASF can no longer do without the Chinese market.
Due to the disruptions in the supply chains caused by the partial or complete closure of entire cities, Volkswagen has to cut back production in the People’s Republic.
The plant in Chengdu was completely closed, production is partially interrupted in other places, the “Tagesschau” reported a few days ago. One of the VW plants is in the province of Xinjiang.
There, ten people were killed in a fire in the city of Urumqi, who could not leave a high-rise building because it was closed from the outside due to Covid measures.
This tragedy ultimately drew people to the streets to protest, the largest anti-leadership movement in Beijing since the Tiananmen Square protests in 1989.
According to the United Nations, the People’s Republic of Xinjiang is committing crimes against humanity against the Uyghur ethnic minority. The atrocious acts have already been classified as genocide by the United States Congress and the Dutch Parliament.
VW still maintains a plant in this region, in which forced laborers for the Chinese state are castigated. The company’s CEO, Herbert Diess, who recently left office, made all sorts of concessions to the leadership in Beijing last summer and said in an interview with “Spiegel” that China had opened up further under Xi Jinping. The opposite is true.
Companies that banked on leader Xi are now trapped: they have lost some of their credibility in the free world because they are collaborating with the totalitarian regime in Beijing.
Xi’s repressive anti-Covid policy, which he has upheld to date, has created immense problems for these corporations in China itself. The only consequence is a “de-coupling”, i.e. an unbundling of their supply chains from the production site in China.
Things should be better all over the world, as China is the only economic power that has not yet managed to adequately protect its population from Corona through vaccination.
It’s a pity that companies like Apple didn’t want to break away from Beijing because of the towering violations of human rights, but are only now starting to rethink where sales are no longer going well.
Alexander Görlach is Honorary Professor of Ethics at Leuphana University in Lüneburg and Senior Fellow at the Carnegie Council for Ethics in International Affairs in New York. The PhD linguist and theologian is currently working on a project on “digital cosmopolitanism” at the Internet Institute at Oxford University and the Faculty of Philosophy at New York University.
Alexander Görlach was a Fellow and Visiting Scholar at Harvard University in the USA and Cambridge University in England. After stints in Taiwan and Hong Kong, he has focused on the rise of China and what it means for East Asian democracies in particular. He has recently published the following titles: “Red Alert: Why China’s Aggressive Foreign Policy in the Western Pacific Is Leading to a Global War” (Hoffmann
From 2009 to 2015, Alexander Görlach was also the publisher and editor-in-chief of the debate magazine The European, which he founded. Today he is a columnist and author for various media such as the Neue Zürcher Zeitung and the New York Times. He lives in New York and Berlin.
