US Business

Apple warned customers would face longer wait times for iPhones with the holiday season approaching, after Covid restrictions in central China “temporarily impacted” production at the world’s largest factory producing the smartphone.

Foxconn, Apple’s principal subcontractor, locked down its massive factory in Zhengzhou last month after a spike in infections — in line with China’s zero-Covid policy. 

In a separate statement Monday, the Taiwanese firm said its fourth quarter earnings this year would take a hit from the coronavirus lockdowns.

Panicking workers last week had fled the site on foot in the wake of allegations of poor conditions at the facility, which employs hundreds of thousands of workers.

“Covid-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China,” California-based Apple said in a statement late Sunday.

“The facility is currently operating at significantly reduced capacity.”

Despite strong demand for Apple’s products ahead of the holiday season, “we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated”, it said. 

“Customers will experience longer wait times to receive their new products.” 

Foxconn is China’s biggest private sector employer, with more than a million people working across the country in about 30 factories and research institutes.

But Zhengzhou is the Taiwanese company’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,” Ivan Lam, an analyst with specialist firm Counterpoint, told AFP.

The company was initially “cautiously optimistic” about its fourth quarter earnings, it said. 

“But due to the pandemic affecting some of our operations in Zhengzhou, the company will ‘revise down’ the outlook for the fourth quarter,” Foxconn said in a statement. 

“Foxconn is now working with the government in (a) concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible,” the company said. 

It did not give any statistical projection for how badly it expected earnings to be hit.

“This is a dark sign of the zero-Covid policy in China impacting production for Apple with Foxconn,” Dan Ives, analyst at Wedbush Securities, told AFP.

“It confirms the Street’s fears with Apple this quarter and will be an albatross on the tech market this week.”

– ‘We are drowning’ –

Local authorities locked down the area surrounding the factory on Wednesday, but not before reports emerged of a lack of adequate medical care at the plant.

Multiple workers have recounted scenes of chaos and increasing disorganisation at Foxconn’s complex of workshops and dormitories, which form a city-within-a-city near Zhengzhou’s airport.

“People with fevers are not guaranteed to receive medicine,” a 30-year-old Foxconn worker, who asked to remain anonymous, told AFP.

“We are drowning,” he said.

China is the last major economy wedded to a strategy of extinguishing Covid outbreaks as they emerge, imposing snap lockdowns, mass testing and lengthy quarantines despite the widespread disruption to businesses and international supply chains.

And authorities poured cold water on speculation that the policy could be relaxed Saturday, with National Health Commission (NHC) spokesperson Mi Feng saying that Beijing would “stick unswervingly to… the overall policy of dynamic zero-Covid”.

“At present, China is still facing the dual threat of imported infections and the spread of domestic outbreaks,” Mi said at a press briefing.

“The disease control situation is as grim and complex as ever,” he said. “We must continue to put people and lives first.”

Joe Biden and Donald Trump headline a frantic last day of campaigning Monday on the eve of a midterm election that will shape the rest of the US president’s term — and could pave the way for a White House comeback by his predecessor.

Biden’s Democrats are facing a gargantuan struggle to hang on to Congress, after a race the president has cast as a “defining” moment for US democracy — though kitchen-table issues like inflation have largely dominated the campaign.

Republicans are comfortably placed to snatch a House majority on Tuesday, and many Democrats fear the Senate also slipping away in a defeat that would see Biden’s foes in near total charge of legislation during his last two years in the White House.

Polls show most Americans are anxious about the economy and feel the country is on the wrong track, emboldening Republican candidates in districts that once looked out of reach.

With all 435 seats in the House of Representatives up for grabs alongside a third of the 100-member Senate and a slew of state posts, Democrats were putting a brave face on their prospects.

“The party in the White House usually loses during midterms but the reality is we still have a very strong pathway, not just to keeping the Senate but really picking up seats,” New Jersey’s Cory Booker told ABC on Sunday.

Democratic candidates have been lent star power on the campaign trail by the party’s most popular elder statesmen, including previous presidents Barack Obama and Bill Clinton.

Republicans have tapped a narrower roster of their own political big hitters, with the campaign spotlight turning in recent weeks to Trump — who has been teasing a probable new run for the presidency in 2024.

Biden and Trump will go head-to-head on election eve: the president with a rally near the capital in Maryland, while Trump will be campaigning in a turbulent Senate race in Ohio.

– ‘Wake-up call’ –

The political landscape has been tilting away from Democrats since the summer, with polls showing Republicans odds-on for a double-digit majority in the House.

“This is going to be a wake-up call to President Biden,” was the bullish weekend prediction of Glenn Youngkin, the Republican governor of Virginia.

The Senate is more of a toss-up but Democratic hopes of keeping the upper chamber, which they control thanks to tiebreaking votes from Vice President Kamala Harris, hang in the balance.

Races in Pennsylvania, Nevada, Wisconsin, Georgia, New Hampshire and Ohio have narrowed to projected photo finishes, and any one of them could swing the balance of power.

Democrats have focused their closing arguments on voting rights, protecting abortion access and welfare — and in Biden’s case, on the threat posed by growing support among Trump’s Republicans for political conspiracy theories.

The Republicans counter that a vote for Democrats means no end to soaraway inflation and rising violent crime, seeking to make the midterms a referendum on the president.

With his approval rating marooned around 42 percent, Biden has largely avoided the most contentious states.

But he rallied alongside his former boss Obama in Pennsylvania Saturday, as part of a hectic agenda of late stump stops that has also taken him to Illinois, Florida and New York.

The president rebuked extremist supporters of “defeated president” Trump, telling the crowd: “Your right to choose is on the ballot. Your right to vote is on the ballot.”

– ‘Decline and fall’ –

Staging a rival weekend rally in the swing state, Trump — who continues to push false claims the 2020 election was stolen — accused the “radical, crazy” Democrats of bringing about “the decline and fall of America.”

The US president has major achievements to tout, including curbs on prescription drug pricing, ramped-up microchip manufacturing and record investments in infrastructure.

Democrats have struggled to turn these legislative victories into enthusiasm in the US heartland.

But Amy Klobuchar, a 2016 presidential hopeful, pushed back Sunday on the suggestion Democrats had lost the messaging war, projecting a good night for her party. 

Forty-eight percent of likely voters said they prefer a Democratic-controlled Congress in the final national NBC News poll of the campaign, while 47 percent want Republicans in charge.

But 80 percent of Republican-leaning voters say they are certain to turn out or have already done so, according to a new Washington Post-ABC News poll, six points above the Democratic figure.

Turnout forecasters always keep a keen eye on Election Day weather, which looks to be warmer than average in most of the country.

About 40 million Americans had cast early votes as of Sunday afternoon, according to the United States Elections Project, narrowly surpassing the figure for 2018.

Most Asian markets rose on Monday following strong US jobs data, with fresh rallies seen in Hong Kong even after China said it would stick to its strict zero-Covid policy.

Global stock markets and oil prices were buoyant last week on hopes that Beijing would roll back some of its economically painful policies aimed at stamping out the disease within its borders.

But on Saturday, the Chinese government said it would “unswervingly” stick to its current plan, which involves harsh lockdowns and strict quarantine and testing regimens for even the smallest clusters of cases.

Wall Street equities had enjoyed a boost on Friday from the latest US jobs data, which showed that hiring remained resilient and wages continued to rise, though at a slower pace.

The data, which comes days ahead of critical US midterm elections, raised hopes of a soft landing for the world’s biggest economy despite aggressive Fed rate hikes aimed at taming inflation.

All three main US indexes ended around 1.3 percent higher on Friday, and Tokyo shares extended those gains, trading up 1.3 percent in the early afternoon.

Hong Kong shares dipped slightly at the open, then rocketed 3.4 percent by the break — adding to a jump of more than five percent in the previous session.

Bourses in Shanghai and Shenzhen also edged up 0.5 percent and 0.6 percent respectively, having started the day flat.

“Last week, the financial market was stirring on rumours of China reopening,” Raymond Yeung and Zhaopeng Xing of ANZ Research said in a note on Monday.

But as the rumours about a reopening were unsubstantiated, “it is more likely the market is over-interpreting new information and downplaying old developments”, they wrote.

“Obviously, China feels the urgency to normalise the economy… But the political leadership will not adopt ‘living with Covid’,” the pair added.

“In our view, the availability of locally developed new vaccines will be a game changer”.

China is the last major economy wedded to a strategy of extinguishing Covid-19 outbreaks as they emerge, despite the widespread disruption to businesses and international supply chains.

In morning trade on Monday, Seoul rose 0.9 percent, Taipei was up 1.5 percent and Sydney was up 0.5 percent. Singapore added 0.3 percent, and Jakarta was flat.

Dashed hopes of a Chinese reopening also drove down oil prices, which had rallied on Friday on the optimism that Beijing could soon change course, pushing up demand for crude.

– Key figures around 0400 GMT –

Tokyo – Nikkei 225: UP 1.3 percent at 27,543.52

Hong Kong – Hang Seng Index: UP 3.4 percent at 16,714.57 (break)

Shanghai – Composite: UP 0.5 percent at 3,084.87 

London – FTSE 100: UP 2.0 percent at 7,334.84 (close)

Pound/dollar: DOWN at $1.1309 from $1.1376 Friday

Euro/dollar: DOWN at $0.9937 from $0.9964

Dollar/yen: UP at 147.21 yen from 146.62 yen

Euro/pound: UP at 87.71 pence from 87.56 pence

West Texas Intermediate: DOWN 1.3 percent at $91.41 per barrel

Brent North Sea crude: DOWN 1.0 percent at $97.55 per barrel

New York – Dow: UP 1.3 percent at 32,403.22 (close)

Most Asian markets started the week with gains Monday following strong US jobs data, although stocks in Shanghai were flat after China said it would stick to its strict zero-Covid policy.

Global stock markets and oil prices rallied last week on hopes that Beijing would roll back some of its economically painful policies aimed at stamping out the disease within its borders.

But on Saturday, the Chinese government said it would “unswervingly” stick to its current plan, which involves harsh lockdowns and strict quarantine and testing regimens for even the smallest clusters of cases.

Wall Street equities had enjoyed a boost on Friday from the latest US jobs data, which showed that hiring remained resilient and wages continued to rise, though at a slower pace.

The data, which comes days ahead of critical US midterm elections, raised hopes of a soft landing for the world’s biggest economy despite aggressive Fed rate hikes aimed at taming inflation.

All three main US indexes ended around 1.3 percent higher on Friday, and Tokyo shares extended those gains on Monday to end the morning session 1.2 percent up.

Hong Kong shares dipped slightly at the open but quickly recovered to add 1.4 percent — adding to a jump of more than five percent in the previous session.

Bourses in Shanghai and Shenzhen were barely changed in morning trade, however.

“Last week, the financial market was stirring on rumours of China reopening,” Raymond Yeung and Zhaopeng Xing of ANZ Research said in a note on Monday.

But as the rumours about a reopening were unsubstantiated, “it is more likely the market is over-interpreting new information and downplaying old developments”, they wrote.

“Obviously, China feels the urgency to normalise the economy… But the political leadership will not adopt ‘living with Covid’,” the pair added.

“In our view, the availability of locally developed new vaccines will be a game changer”.

China is the last major economy wedded to a strategy of extinguishing Covid-19 outbreaks as they emerge.

It is still imposing snap lockdowns, mass testing and lengthy quarantines — despite the widespread disruption to businesses and international supply chains.

Seoul rose 0.8 percent, Taipei was up 1.1 percent and Sydney was up 0.5 percent in early trade on Monday. Singapore was flat and Jakarta dipped 0.3 percent.

Dashed hopes of a Chinese reopening also drove down oil prices, which had rallied on Friday on the optimism that Beijing could soon change course, pushing up demand for crude.

– Key figures around 0230 GMT –

Tokyo – Nikkei 225: UP 1.2 percent at 27,528.66 (break)

Hong Kong – Hang Seng Index: UP 1.4 percent at 16,393.36

Shanghai – Composite: DOWN 0.1 percent at 3,068.62

London – FTSE 100: UP 2.0 percent at 7,334.84 (close)

Pound/dollar: DOWN at $1.1325 from $1.1376 Friday

Euro/dollar: DOWN at $0.9933 from $0.9964

Dollar/yen: UP at 147.21 yen from 146.62 yen

Euro/pound: UP at 87.80 pence from 87.56 pence

West Texas Intermediate: DOWN 1.4 percent at $91.28 per barrel

Brent North Sea crude: DOWN 1.2 percent at $97.43 per barrel

New York – Dow: UP 1.3 percent at 32,403.22 (close)

Apple said Covid restrictions have “temporarily impacted” production at the world’s largest iPhone factory in central China, warning that customers will now face longer wait times ahead of the holiday season.

Foxconn, Apple’s principal subcontractor, locked down its massive factory in Zhengzhou last month after a spike in infections — in line with China’s zero-Covid policy. 

In a separate statement Monday, the Taiwanese firm said its fourth quarter earnings this year would take a hit from the coronavirus lockdowns.

Panicking workers last week had fled the site on foot in the wake of allegations of poor conditions at the facility, which employs hundreds of thousands of workers.

“Covid-19 restrictions have temporarily impacted the primary iPhone 14 Pro and iPhone 14 Pro Max assembly facility located in Zhengzhou, China,” California-based Apple said in a statement late Sunday.

“The facility is currently operating at significantly reduced capacity.”

Despite strong demand for Apple’s products ahead of the holiday season, “we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated”, it said. 

“Customers will experience longer wait times to receive their new products.” 

Foxconn is China’s biggest private sector employer, with over a million people working across the country in about 30 factories and research institutes.

But Zhengzhou is the Taiwanese company’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,” Ivan Lam, an analyst with specialist firm Counterpoint, told AFP.

The company was initially “cautiously optimistic” about its fourth quarter earnings, it said. 

“But due to the pandemic affecting some of our operations in Zhengzhou, the company will ‘revise down’ the outlook for the fourth quarter,” Foxconn said in a statement. 

“Foxconn is now working with the government in (a) concerted effort to stamp out the pandemic and resume production to its full capacity as quickly as possible,” the company said. 

It did not give any statistical projection for how badly they expected earnings to be hit. 

– ‘We are drowning’ –

Local authorities locked down the area surrounding the factory on Wednesday, but not before reports emerged of a lack of adequate medical care at the plant.

Multiple workers have recounted scenes of chaos and increasing disorganisation at Foxconn’s complex of workshops and dormitories, which form a city-within-a-city near Zhengzhou’s airport.

“People with fevers are not guaranteed to receive medicine,” another Foxconn worker, a 30-year-old man who also asked to remain anonymous, told AFP.

“We are drowning,” he said.

China is the last major economy wedded to a strategy of extinguishing Covid outbreaks as they emerge, imposing snap lockdowns, mass testing and lengthy quarantines despite the widespread disruption to businesses and international supply chains.

And authorities poured cold water on speculation that the policy could be relaxed Saturday, with National Health Commission (NHC) spokesperson Mi Feng saying that Beijing would “stick unswervingly to… the overall policy of dynamic zero-Covid”.

“At present, China is still facing the dual threat of imported infections and the spread of domestic outbreaks,” Mi said at a press briefing.

“The disease control situation is as grim and complex as ever,” he said. “We must continue to put people and lives first.”