Chinese Business

The lockdown of Foxconn’s Zhengzhou factory, the world’s biggest producer of iPhones, has highlighted some of the risks of relying on zero-Covid China’s manufacturing sector, analysts told AFP.

Foxconn, Apple’s principal subcontractor, has seen a surge in Covid-19 cases at its Zhengzhou site, leading the company to lock down the vast complex in a bid to keep the virus in check.

Images then emerged of panicking workers fleeing the site on foot in the wake of allegations of poor conditions at the facility, which employs hundreds of thousands of workers.

Foxconn is China’s biggest private sector employer, with over a million people working across the country in its around thirty factories and research institutes.

But Zhengzhou is the Taiwanese giant’s crown jewel, churning out iPhones in quantities not seen anywhere else.

“In a normal situation, almost all the iPhone production is happening in Zhengzhou,” said Ivan Lam, an analyst with specialist firm Counterpoint.

– Risk of ‘strong dependence’ –

Apple manufactures more than 90 percent of its products in China, which is also one of its most important markets.

“For Apple, it is once again a bad example in terms of the stability of production chains,” Alicia Garcia Herrero, Asia-Pacific manager for Natixis bank, told AFP.

Experts say the company’s heavy dependence on China “brings potential risks, especially when the US-China trade war shows no signs of de-escalating,” according to Dezan Shira & Associates, a consulting firm.

Opened in 2010, the Zhengzhou factory employs up to 300,000 people who live on-site all year round  — creating a sprawling tech hub known as “iPhone city”.

It is made up of three factories, one of which produces the iPhone 14 — Apple’s newest handset model.

Apple did not respond to AFP’s request for comment on how exactly the lockdown will affect its production.

Analyst Lam estimates the partial stopping of work at the site resulted in a loss of “10 to 30 percent” of output, but said part of the production has also been temporarily moved to other Foxconn sites in China.

According to Foxconn, the site is currently operating a “closed loop” with the workers avoiding all contact with the outside world, while their daily bonuses have been quadrupled.

“This incident may have a limited impact,” on worldwide iPhone production, estimated analyst Ming-Chi Kuo, who specialises in Apple products.

“But suppliers in China must learn to improve closed-loop production efficiency in response to the zero-Covid policy,” he added.

– Looking elsewhere –

China is the last major economy committed to a zero-Covid strategy, persisting with snap lockdowns, mass testing and lengthy quarantines in a bid to stamp out emerging outbreaks.

But new variants have tested local officials’ ability to snuff out flare-ups faster than they can spread, causing much of the country to live under an ever-changing mosaic of Covid curbs.

Apple has already begun outsourcing part of its production to India and is eyeing Vietnam in a bid to wean itself off Chinese manufacturing — a trend accelerated by Covid.

But that’s not so simple — last year, nearly 7.5 million iPhones were made in India, just three percent of Apple’s total production.

“Increasing the capacity of factories (in India) is difficult,” Lam said.

Asian and European markets sank Thursday after the Federal Reserve hiked interest rates and boss Jerome Powell suggested they would go higher than expected, blowing a hole in hopes for a more dovish pivot in its fight against inflation.

Equities have rallied for more than a week on speculation the US central bank would join others in tamping down its monetary-tightening campaign as the economy showed signs of slowing.

On Wednesday, the bank unveiled a fourth straight 75 basis-point increase — the sixth hike this year — and opened the door to a smaller increase at future meetings, giving a boost to Wall Street.

But Powell soon after sent traders scattering when he told a news conference that while it would be appropriate to lessen the size of the hikes, “incoming data since our last meeting suggests that ultimate level of interest rates will be higher than previously expected”.

He added that “we still have some ways” until borrowing costs were at the necessary level and that it “is very premature to be thinking about pausing”.

And while there is a building fear that the increasingly tight monetary conditions will send the world’s top economy into a recession, the Fed boss said it would take time for the effects of the measures to kick in.

“The historical record cautions strongly against prematurely loosening policy,” he warned. “We will stay the course, until the job is done.”

Investors now expect rates to top out at more than five percent, compared with four percent currently.

The comments hammered the narrative that had supported stocks, sending Wall Street’s three main indexes tanking — led by rate-sensitive tech giants — and pushing the dollar up against its peers.

“Every time the market gets a little bit of dovish hope, it gets smacked on the nose with a rolled-up newspaper,” Scott Rundell of Mutual Ltd said. “There’s a lot of volatility still ahead.”

Hong Kong led the losses as the city’s central bank hiked rates in line with the Fed, owing to their policy link via the dollar peg.

Traders gave back a chunk of the previous two days’ gains, which came on the back of speculation China was planning to roll back some of its painful zero-Covid policies. Adding to the selling was confirmation from Beijing’s health authority that it intended to stick to the strategy.

Shanghai, Sydney, Seoul, Wellington, Mumbai, Bangkok, Taipei and Manila were also well in the red. Tokyo was closed for a holiday.

London, Paris and Frankfurt extended the losses.

“While the market got what it wanted in the context of expectations of smaller rate rises, they probably weren’t expecting that rates might need to go quite a lot higher, thus removing any prospect of an imminent pause, or even a rate cut much before the end of 2024,” said Michael Hewson at CMC Markets.

The release Friday of US jobs figures will give another insight into the state of the economy and particularly the labour market, which has remained resilient in the face of decades-high inflation and rising rates.

As the Fed is basing its moves on data, a strong reading could give officials room to continue lifting. 

Before that, the Bank of England is tipped to lift its key rate by 0.75 percentage points to three percent — the most in 33 years and putting them at the highest since 2008 — though some analysts are even predicting a full percentage point hike.

The pound sank against the dollar ahead of the announcement.

– Key figures around 0815 GMT –

Hong Kong – Hang Seng Index: DOWN 3.1 percent at 15,339.49 (close)

Shanghai – Composite: DOWN 0.2 percent at 2,997.81 (close)

Tokyo – Nikkei 225: Closed for a holiday

London – FTSE 100: DOWN 0.8 percent at 7,087.64

Euro/dollar: DOWN at $0.9776 from $0.9816 on Wednesday

Pound/dollar: DOWN at $1.1325 from $1.1390

Dollar/yen: UP at 148.00 yen from 147.90 yen

Euro/pound: UP at 86.33 pence from 86.17 pence

West Texas Intermediate: DOWN 1.0 percent at $89.13 per barrel

Brent North Sea crude: DOWN 0.7 percent at $95.45 per barrel

New York – Dow: DOWN 1.6 percent at 32,147.76 (close)

Asian markets sank Thursday after the Federal Reserve hiked interest rates and boss Jerome Powell suggested they would go higher than expected, blowing a hole in hopes for a more dovish pivot in its fight against inflation.

Equities have rallied for more than a week on speculation the US central bank would join others in tamping down its monetary-tightening campaign as the economy showed signs of slowing.

On Wednesday, the bank unveiled a fourth straight 75 basis-point increase — the sixth hike this year — and opened the door to a smaller increase at future meetings, giving a boost to Wall Street.

However, Powell soon after sent traders scattering when he told a news conference that while it would be appropriate to lessen the size of the hikes, “incoming data since our last meeting suggests that ultimate level of interest rates will be higher than previously expected”.

He added that “we still have some ways” until borrowing costs were at the necessary level and that it “is very premature to be thinking about pausing”.

And while there is a building fear that the increasingly tight monetary conditions will send the world’s top economy into a recession, the Fed boss said it would take time for the effects of the measures to kick in.

“The historical record cautions strongly against prematurely loosening policy,” he warned. “We will stay the course, until the job is done.”

Investors now expect rates to top out at more than five percent, compared with four percent currently.

The comments hammered the narrative that had supported stocks, sending Wall Street’s three main indexes tanking — led by rate-sensitive tech giants — and pushing the dollar up against its peers.

“Every time the market gets a little bit of dovish hope, it gets smacked on the nose with a rolled-up newspaper,” Scott Rundell, Mutual Ltd, said. “There’s a lot of volatility still ahead.”

Hong Kong led the losses as traders gave back a chunk of the previous two days’ gains that came on the back of speculation China was planning to roll back some of its painful zero-Covid policies. Adding to the selling was confirmation from Beijing’s health authority that it intended to stick to the strategy.

Shanghai, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta were also well in the red. Tokyo was closed for a holiday.

The release Friday of US jobs figures will give another insight into the state of the economy and particularly the labour market, which has remained resilient in the face of decades-high inflation and rising rates.

As the Fed is basing its moves on data, a strong reading could give officials room to continue lifting. 

Before that, the Bank of England is tipped to lift its key rate 0.75 percentage points, though some analysts are predicting a full percentage point hike.

– Key figures around 0230 GMT –

Hong Kong – Hang Seng Index: DOWN 2.5 percent at 15,443.42

Shanghai – Composite: DOWN 0.3 percent at 2,993.76

Tokyo – Nikkei 225: Closed for a holiday

Euro/dollar: UP at $0.9836 from $0.9816 on Wednesday

Pound/dollar: UP at $1.1414 from $1.1390

Dollar/yen: DOWN at 147.27 yen from 147.90 yen

Euro/pound: UP at 86.18 pence from 86.17 pence

West Texas Intermediate: DOWN 0.8 percent at $89.32 per barrel

Brent North Sea crude: DOWN 0.5 percent at $95.64 per barrel

New York – Dow: DOWN 1.6 percent at 32,147.76 (close)

London – FTSE 100: DOWN 0.6 percent at 7,144.14 (close)

Social media platform Twitter could become much more entwined with cryptocurrencies and blockchain in the future, one of the backers of Elon Musk’s $44 billion takeover hinted on Wednesday.

Changpeng Zhao, who owns crypto firm Binance and put $500 million into the takeover by the world’s richest man, gave his first hint that he would not be a completely silent investor.

“Let’s give Elon some time to get adjusted,” he told a press conference at the Web Summit tech conference in Lisbon, before adding that he was there to help Twitter in any future crypto-related moves.

Zhao was speaking on the first full day of the get together, which kicked off on Tuesday night with a plea from Ukraine’s first lady for IT workers to use their skills to save lives rather than end them.

“Some IT specialists in Russia have made their choice to be aggressors and murderers,” said Olena Zelenska, urging attendees to make the opposite choice.

The Web Summit brings together start-ups, investors, business leaders and agenda-broadening speakers –- linguist Noam Chomsky and heavyweight boxing champion Oleksandr Usyk are among this year’s line-up.

Organisers said all 70,000 tickets had been sold for the first full-scale edition since coronavirus restrictions halted in-person gatherings in 2020.

Although most major tech firms are represented, the most senior Silicon Valley figures rarely appear at such events any more.

Some attendees were happy with the lower-key approach at a conference that has previously seen the likes of Musk give talks.

“These conferences were getting too big, it was getting harder to find interesting things,” said attendee Gabriele Lemmle from Munich, adding that she was happier to focus on start-ups with fresh ideas.

– Crypto Twitter –

With Silicon Valley bosses in short supply, crypto chiefs filled the void.

In one of his talks, Zhao played down the current slump in his sector and argued that cryptocurrencies were among the most stable assets at the moment.

During his speech at the opening ceremony on Tuesday he had insisted that Musk was the boss and he had no plans for Twitter, but by Wednesday his tone had shifted.

“We want to be very supportive on anything that Twitter does with crypto and web3,” he said, referring to a notional future version of the web that would have crypto and blockchain at its heart.

The Web Summit comes at a time when the tech industry as a whole faces huge difficulties.

Firms are being roiled by supply chain problems, trade disputes between the US and China, plunging profits and creaky business models, and a wider economic slump that has sent investors and consumers fleeing.

But Mark MacGann, a former lobbyist for Uber who leaked thousands of compromising documents on his old firm in July, focused on the problems regulators face in trying to control big tech.

He said regulators were largely limited to issuing fines that were “pocket change” and did nothing to change the behaviour of big tech.

“When you become so big and so wealthy that you become ungovernable and impossible to regulate, that’s very dangerous for society and democracy,” he said. 

MacGann — who led Uber’s lobbying efforts in Europe between 2014 and 2016 — leaked thousands of documents earlier this year that led to widespread accusations that the ride-hailing app had broken the law — allegations the firm denied.

MacGann said Uber had improved since he left, but questioned why the firm was funnelling millions into lobbying designed to stop legislative efforts to give drivers more rights.

And he called for more protection for whistleblowers in tech, arguing that workers who revealed malpractice in the public sector enjoy more safeguards.

Web Summit organisers say more than 1,000 speakers will take part in the event, which runs until Friday, giving talks on subjects from cybersecurity to artificial intelligence.

European and US stock markets slid on Wednesday, with investors on edge before another widely expected jumbo interest rate hike from the US Federal Reserve.

On Wall Street, the Dow was down 0.4 percent in midday trading, while the broader S&P 500 slid 0.8 percent and the tech-heavy Nasdaq slumped 1.3 percent.

London equities shed 0.6 percent on the eve of another expected large rate increase from the Bank of England.

In the eurozone, Frankfurt and Paris fell following weak eurozone manufacturing survey data and a dip in German exports.

“All eyes will be on central banks on both sides of the Atlantic as both the US Federal Reserve and BoE get ready to deliver their rate decisions over the next 24 hours or so,” said AJ Bell investment director Russ Mould.

“While we have a good idea of the quantum of increase both parties will deliver, it will be all about the mood music,” he added.

Global central banks have this year ramped up borrowing costs in an attempt to curb inflation, which has rocketed on sky-high energy costs arising from Russia’s war on Ukraine.

Economists fear that rising rates will spark a global economic downturn because they ramp up loan repayments for individuals and businesses, thereby denting consumer spending and investment.

– US rate clues –

Wednesday’s Fed decision is hotly anticipated by traders hoping for a hint from officials that they are ready to temper their speed of monetary tightening.

“Investors are waiting for clues from the Federal Reserve about the path of rate rises, and in the meantime a slightly more wary mood has settled on the markets,” said Hargreaves Lansdown analyst Susannah Streeter.

“A fourth consecutive 75 basis point hike is not going to surprise anyone, but the key question is whether the Fed will signal that it is ready to pivot to a less hawkish stance in its December and subsequent meetings,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

Analyst Craig Erlam at OANDA said increasing numbers of investors are anticipating Fed policymakers will hint at a slower pace of interest rate hikes from December, given the softness of economic data in some sectors and the lag in impact of monetary policy.

“Investors are so desperate for anything remotely dovish at this point that even a hint could get a strong reaction,” he said.

In Asia, stocks were mixed after Tuesday’s losses on Wall Street, as forecast-beating US data jolted hopes the Fed could soon tone down its hawkish pace of rate hikes.

Hong Kong led gainers — extending the previous day’s surge — as traders remain hopeful China could begin rolling back its economically painful zero-Covid policy, the day after an unverified statement suggesting a shift was taking place.

Suggestions that the Fed could take its foot off the pedal as the world’s top economy shows signs of slowing have helped fuel a rally across risk assets for more than a week.

But some of the wind was taken out of their sails Tuesday after data showed a rise in job openings while other numbers released indicated the manufacturing sector did not perform as badly as expected last month.

The readings suggest the US economy continues to hold up despite recent signs of weakness in the face of decades-high inflation, and Fed policymakers are likely to interpret them as interest rates need to continue to move higher.

– Key figures around 1630 GMT –

New York – Dow: DOWN 0.4 percent at 32,539.42 points

EURO STOXX 50: DOWN 0.8 percent at 3,622.01

London – FTSE 100: DOWN 0.6 percent at 7,144.14 (close)

Frankfurt – DAX: DOWN 0.6 percent at 13,256.74 (close)

Paris – CAC 40: DOWN 0.8 percent at 6,276.74 (close)

Tokyo – Nikkei 225: DOWN 0.1 percent at 27,663.39 (close)

Hong Kong – Hang Seng Index: UP 2.4 percent at 15,827.17 (close)

Shanghai – Composite: UP 1.2 percent at 3,003.37 (close)

Euro/dollar: DOWN at $0.9865 from $0.9883 on Tuesday

Pound/dollar: DOWN at $1.1455 from $1.1486

Dollar/yen: DOWN at 147.09 yen from 148.23 yen

Euro/pound: UP at 86.12 pence from 85.96 pence

Brent North Sea crude: UP 1.8 percent at $96.37 per barrel

West Texas Intermediate: UP 2.1 percent at $90.20 per barrel

burs-rl/rox

European and US stock markets slid on Wednesday, with investors on edge before another widely expected jumbo interest rate hike from the US Federal Reserve.

London equities shed 0.5 percent on the eve of another expected large rate increase from the Bank of England.

In the eurozone, Frankfurt and Paris were both following weak eurozone manufacturing survey data and a dip in German exports.

“All eyes will be on central banks on both sides of the Atlantic as both the US Federal Reserve and BoE get ready to deliver their rate decisions over the next 24 hours or so,” said AJ Bell investment director Russ Mould.

“While we have a good idea of the quantum of increase both parties will deliver, it will be all about the mood music,” he added.

Global central banks have this year ramped up borrowing costs in an attempt to curb inflation, which has rocketed on sky-high energy costs arising from Russia’s war on Ukraine.

Economists fear that rising rates will spark a global economic downturn because they ramp up loan repayments for individuals and businesses, thereby denting consumer spending and investment.

– US rate clues –

Wednesday’s Fed decision is hotly anticipated by traders hoping for a hint from officials that they are ready to temper their speed of monetary tightening.

“Investors are waiting for clues from the Federal Reserve about the path of rate rises, and in the meantime a slightly more wary mood has settled on the markets,” said Hargreaves Lansdown analyst Susannah Streeter.

“A fourth consecutive 75 basis point hike is not going to surprise anyone, but the key question is whether the Fed will signal that it is ready to pivot to a less hawkish stance in its December and subsequent meetings,” said market analyst Fawad Razaqzada at City Index and FOREX.com.

Analyst Craig Erlam at OANDA said increasing numbers of investors are anticipating Fed policymakers will hint at a slower pace of interest rate hikes from December, given the softness of economic data in some sectors and the lag in impact of monetary policy.

“Investors are so desperate for anything remotely dovish at this point that even a hint could get a strong reaction,” he said.

In Asia, stocks were mixed after Tuesday’s losses on Wall Street, as forecast-beating US data jolted hopes the Fed could soon tone down its hawkish pace of rate hikes.

Hong Kong led gainers — extending the previous day’s surge — as traders remain hopeful China could begin rolling back its economically painful zero-Covid policy, the day after an unverified statement suggesting a shift was taking place.

Suggestions that the Fed could take its foot off the pedal as the world’s top economy shows signs of slowing have helped fuel a rally across risk assets for more than a week.

But some of the wind was taken out of their sails Tuesday after data showed a rise in job openings while other numbers released indicated the manufacturing sector did not perform as badly as expected last month.

The readings suggest the US economy continues to hold up despite recent signs of weakness in the face of decades-high inflation, and Fed policymakers are likely to interpret them as interest rates need to continue to move higher.

– Key figures around 1330 GMT –

London – FTSE 100: DOWN 0.5 percent at 7,151.73 points

Frankfurt – DAX: DOWN 0.3 percent at 13,303.53

Paris – CAC 40: DOWN 0.6 percent at 6,291.04

EURO STOXX 50: DOWN at 3,632.94

New York – Dow: DOWN 0.3 percent at 32,568.10

Tokyo – Nikkei 225: DOWN 0.1 percent at 27,663.39 (close)

Hong Kong – Hang Seng Index: UP 2.4 percent at 15,827.17 (close)

Shanghai – Composite: UP 1.2 percent at 3,003.37 (close)

Euro/dollar: UP at $0.9907 from $0.9883 on Tuesday

Pound/dollar: UP at $1.1502 from $1.1486

Dollar/yen: DOWN at 146.94 yen from 148.23 yen

Euro/pound: UP at 86.12 pence from 85.96 pence

Brent North Sea crude: DOWN 0.1 percent at $94.55 per barrel

West Texas Intermediate: DOWN 0.2 percent at $88.22 per barrel

burs-rl/kjm

A lobbyist who leaked thousands of compromising documents on Uber will on Wednesday detail his efforts to bring change to one of the world’s leading companies at an annual tech summit in Lisbon.

Revelations in July from Mark MacGann, who led Uber’s lobbying efforts in Europe between 2014 and 2016, led to widespread accusations that the ride-hailing app had broken the law — allegations the firm denied.

Reports based on his leaks alleged the company had obstructed justice and sent drivers to protests without concern for their safety, though Uber denied this and said the accusations were outdated.

MacGann will appear on the first full day of the Web Summit, an annual tech conference that kicked off on Tuesday night with a plea from Ukraine’s first lady for IT workers to use their skills to save lives rather than end them.

“Some IT specialists in Russia have made their choice to be aggressors and murderers,” said Olena Zelenska, urging attendees to make the opposite choice.

The Web Summit brings together start-ups, investors, business leaders and agenda-broadening speakers –- linguist Noam Chomsky and heavyweight boxing champion Oleksandr Usyk are among this year’s line-up.

Organisers said all 70,000 tickets had been sold for the first full-scale edition since coronavirus restrictions halted in-person gatherings in 2020.

Although most major tech firms are represented, the most senior Silicon Valley figures rarely appear at such events any more.

Some attendees were happy with the lower-key approach at a conference that has previously seen the likes of Elon Musk show up.

“These conferences were getting too big, it was getting harder to find interesting things,” said attendee Gabriele Lemmle from Munich, adding that she was happier to focus on start-ups with fresh ideas.

– 100 years of Twitter –

During the opening ceremony on Tuesday, Chanpeng Zhao, the boss of cryptocurrency firm Binance, was given centre stage and faced questions about the future of a sector that is still suffering a massive slump.

He told the audience it was part of an economic cycle and argued that cryptocurrencies were in fact the most stable assets right now.

Zhao also faced questions about his decision to back Musk’s takeover of Twitter to the tune of $500 million, telling the audience he was committed to the deal for the long haul.

“We anticipate to be involved for the next 10, 50, 100 years,” he said, adding that Musk’s guidance would make the platform much stronger in the decades to come.

The Web Summit comes at a time when the tech industry as a whole faces huge difficulties.

Firms are being roiled by supply chain problems, trade disputes between the US and China, plunging profits and creaky business models, and a wider economic slump that has sent investors and consumers fleeing.

Event organiser Paddy Cosgrave is keen to show that the event does not shy away from those issues, highlighting the platform it gives to critics and whistleblowers.

MacGann’s appearance this year follows last year’s turn by Frances Haughen, who laid out allegations that Facebook prioritised engagement over the mental wellbeing of young people.

Facebook’s Nick Clegg then made an appearance to deny the allegations.

However, the opening salvoes of this year’s summit have stuck resolutely to the idea of technology as a force for positive change.

“Tech is not a panacea, but it can help to solve the problems that are in front of us,” Portuguese Prime Minister Antonio Costa told the opening ceremony, urging a focus on climate change.

The organisers say more than 1,000 speakers will take part in the event, which runs until Friday, giving talks on subjects from cybersecurity to artificial intelligence.

Chinese authorities imposed lockdowns on 600,000 people in the area surrounding the world’s largest iPhone factory on Wednesday, as workers complained of disorderly Covid controls at the facility.

All people except Covid-prevention volunteers and essential workers “must not leave their residences except to receive Covid tests and emergency medical treatment”, officials from central China’s Zhengzhou Airport Economy Zone said.

The move comes after images emerged on Chinese social media last week showing people breaking out of the facility, which is run by Taiwanese tech giant Foxconn and makes products for Apple.

Employees complained online of poor conditions, a lack of supplies and having to flee the factory on foot to avoid Covid transport curbs. Foxconn says there are currently more than 200,000 workers at its Zhengzhou plant.

“Being paid is not important anymore, the most important thing is to survive,” one 30-year-old man working at Foxconn told AFP, saying he was staying at the factory because he was afraid of adding to an outbreak in his hometown.

“The anti-virus measures on campus are shambolic, virus-negative people are living together with virus-positive people,” said the worker, who asked to remain anonymous.

He said the food provided to employees was “not filling”, and complained of a lack of medicine for sick colleagues.

China is the last major economy committed to a zero-Covid strategy, persisting with snap lockdowns, mass testing and lengthy quarantines in a bid to stamp out emerging outbreaks.

But new variants have tested local officials’ ability to snuff out flare-ups faster than they can spread, causing much of the country to live under an ever-changing mosaic of Covid curbs.

The district in Zhengzhou city said Wednesday that all businesses would be required to work from home, with only “key enterprises” allowed to continue operating. It did not specify which businesses fell under that category.

Only medical vehicles and those delivering essentials are allowed on the streets.

The district’s more than 600,000 residents will have to take nucleic acid tests every day, the local government said, warning that it would “resolutely crack down on all kinds of violations”.

The Communist Party-run Dahe Daily said on Wednesday local authorities would “thoroughly disinfect” Foxconn’s facilities, including employee dormitories, over the next three days. Workers quarantining at the factory would need to show seven days of negative tests before leaving for their hometowns.

The paper also said the government had promised to provide timely meals and to set up a counselling hotline for workers.

– ‘Closed loop’-

Foxconn told AFP on Wednesday its Zhengzhou park “maintains closed-loop operation”, without providing details.

The company said at the weekend it was testing employees daily and offering transport to those who wanted to leave, after the videos on social media showed employees walking down motorways with their suitcases.

Footage shared with AFP by a Foxconn employee showed a large group of workers pushing their suitcases down an empty road on Tuesday afternoon, towards a line of people in hazmat suits.

The Zhengzhou factory accounts for around 80 percent of iPhone 14 production, senior analyst Ivan Lam at Counterpoint Research told AFP.

Apple did not immediately respond to an AFP request for comment.

Local governments in the area surrounding Zhengzhou city have asked Foxconn workers to register with authorities if they return home and to complete several days of quarantine upon arrival.

The company also said on Tuesday it would quadruple bonuses for employees willing to remain at the factory during the outbreak.

Chinese social media users accused Zhengzhou authorities on Wednesday of “performatively” lifting Covid restrictions after the city announced a day earlier it would “restore normal production and life”.

“In the morning you lift the lockdown, then at night you lock down again, what are you trying to do?” Weibo user Taodixing asked.

China reported more than 2,000 fresh domestic infections on Wednesday for the third day in a row.

Henan province, where Zhengzhou is located, officially reported 359 Covid-19 infections on Wednesday, a jump from Tuesday’s 104.

The southern Chinese manufacturing hub of Guangzhou also announced partial lockdowns in several districts this week in response to rising case numbers.

According to analysts Capital Economics, the number of people in quarantine in China is at its highest level since the Shanghai lockdown in spring, with outbreaks in more than 50 cities.

European stock markets mostly dipped Wednesday, with investors on edge before another widely-expected jumbo interest rate hike from the US Federal Reserve.

London equities slipped on the eve of another expected large rate increase from the Bank of England.

In the eurozone, Frankfurt fell but Paris rose following weak eurozone manufacturing survey data and a dip in German exports.

“All eyes will be on central banks on both sides of the Atlantic as both the US Federal Reserve and BoE get ready to deliver their rate decisions over the next 24 hours or so,” said AJ Bell investment director Russ Mould.

“While we have a good idea of the quantum of increase both parties will deliver, it will be all about the mood music.”

Global central banks have this year ramped up borrowing costs in an attempt to curb inflation, which has rocketed on sky-high energy costs arising from Russia’s war on Ukraine.

Economists fear that rising rates will spark a global economic downturn because they ramp up loan repayments for individuals and businesses, thereby denting consumer spending and investment.

– US rate clues –

Wednesday’s Fed decision is hotly anticipated by traders hoping for a hint from officials that they are ready to temper their speed of monetary tightening.

“Investors are waiting for clues from the Federal Reserve about the path of rate rises, and in the meantime a slightly more wary mood has settled on the markets,” added Hargreaves Lansdown analyst Susannah Streeter.

“The Fed is expected to bring in another super-size rate hike of 0.75 percentage points.”

In Asia, stocks traded mixed Wednesday after losses on Wall Street, as forecast-beating US data jolted hopes the Fed could soon tone down its hawkish pace of rate hikes.

Hong Kong led gainers — extending the previous day’s surge — as traders remain hopeful China could begin rolling back its economically painful zero-Covid policy, the day after an unverified statement suggesting a shift was taking place.

Suggestions that the Fed could take its foot off the pedal as the world’s top economy shows signs of slowing have helped fuel a rally across risk assets for more than a week.

But some of the wind was taken out of their sails Tuesday after data showed a rise in job openings while other numbers released indicated the manufacturing sector did not perform as badly as expected last month.

The readings suggest the US economy continues to hold up despite recent signs of weakness in the face of decades-high inflation.

Elsewhere, oil prices rose Wednesday after a report said US stockpiles saw a huge drop last week, suggesting demand remains intact as worries about supplies continue to swirl.

– Key figures around 0930 GMT –

London – FTSE 100: DOWN 0.1 percent at 7,182.65 points

Frankfurt – DAX: DOWN 0.2 percent at 13,312.85

Paris – CAC 40: UP 0.1 percent at 6,332.78

EURO STOXX 50: FLAT at 3,651.24

Tokyo – Nikkei 225: DOWN 0.1 percent at 27,663.39 (close)

Hong Kong – Hang Seng Index: UP 2.4 percent at 15,827.17 (close)

Shanghai – Composite: UP 1.2 percent at 3,003.37 (close)

New York – Dow: DOWN 0.24 percent at 32,653.20 (close)

Euro/dollar: UP at $0.9890 from $0.9883 on Tuesday

Pound/dollar: UP at $1.1496 from $1.1486

Dollar/yen: DOWN at 147.10 yen from 148.23 yen

Euro/pound: UP at 86.05 pence from 85.96 pence

Brent North Sea crude: UP 0.5 percent at $95.11 per barrel

West Texas Intermediate: UP 0.5 percent at $88.84 per barrel

Chinese authorities imposed lockdowns on 600,000 people in the area surrounding the world’s largest iPhone factory on Wednesday after workers fled to avoid a coronavirus outbreak and the resulting restrictions.

All people except Covid-prevention volunteers and essential workers “must not leave their residences except to receive Covid tests and emergency medical treatment”, officials from central China’s Zhengzhou Airport Economy Zone said.

The move comes after images emerged on Chinese social media last week showing people breaking out of the facility, which is run by Taiwanese tech giant Foxconn and makes products for Apple.

Some employees were complaining online of poor conditions, a lack of supplies and having to flee the factory on foot to avoid Covid transport curbs. Foxconn employs hundreds of thousands of workers in Zhengzhou.

China is the last major economy committed to a zero-Covid strategy, persisting with snap lockdowns, mass testing and lengthy quarantines in a bid to stamp out emerging outbreaks.

But new variants have tested local officials’ ability to snuff out flare-ups faster than they can spread, causing much of the country to live under an ever-changing mosaic of Covid curbs.

The district in Zhengzhou city said Wednesday that all businesses would be required to work from home, with only “key enterprises” allowed to continue operating. It did not specify which businesses fell under that category.

Only medical vehicles and those delivering essentials are allowed on the streets.

The district’s more than 600,000 residents will have to take nucleic acid tests every day, the local government said, warning that it would “resolutely crack down on all kinds of violations”.

The Communist Party-run Dahe Daily said on Wednesday local authorities would “thoroughly disinfect” Foxconn’s facilities, including employee dormitories, over the next three days. Workers quarantining at the factory would need to show seven days of negative tests before leaving for their hometowns.

The paper also said the government had promised to provide timely meals and to set up a counselling hotline for workers.

– ‘Closed loop’-

Foxconn told AFP on Wednesday its Zhengzhou park “maintains closed-loop operation”, without providing details.

The company said at the weekend it was testing employees daily and offering transport to those who wanted to leave, after the videos on social media showed employees walking down motorways with their suitcases.

Apple did not immediately respond to an AFP request for comment.

Local governments in the area surrounding Zhengzhou city have asked Foxconn workers to register with authorities if they return home and to complete several days of quarantine upon arrival.

The company also said on Tuesday it would quadruple bonuses for employees willing to remain at the factory during the outbreak.

Chinese social media users accused Zhengzhou authorities on Wednesday of “performatively” lifting Covid restrictions after the city announced a day earlier it would “restore normal production and life”.

“In the morning you lift the lockdown, then at night you lock down again, what are you trying to do?” Weibo user Taodixing asked.

China reported more than 2,000 fresh domestic infections on Wednesday for the third day in a row.

Henan province, where Zhengzhou is located, officially reported 359 Covid-19 infections on Wednesday, a jump from Tuesday’s 104.

The southern Chinese manufacturing hub of Guangzhou also announced partial lockdowns in several districts this week in response to rising case numbers.

According to analysts Capital Economics, the number of people in quarantine in China is at its highest level since the Shanghai lockdown in spring, with outbreaks in more than 50 cities.