Hundreds of workers at Apple Inc.’s main iPhone manufacturing plant in China clashed with security personnel as tensions boiled over after nearly a month under tight restrictions meant to quell an outbreak of Covid.

Workers at the Foxconn Technology Group factory left dormitories in the early hours of Wednesday, jostling and jostling the white-clad guards they vastly outnumbered, according to videos sent by a witness to parts of the protest . Several people in white suits hit a person lying on the ground with sticks in another clip. Onlookers shouted “fight, fight!” as crowds of people forced their way through the barricades. At one point, several people surrounded an occupied police car and began shaking the vehicle, shouting incoherently.

The protest began overnight over unpaid wages and fears of the infection spreading, according to the witness, asking to remain anonymous for fear of repercussions. Several workers were injured and riot police arrived at the scene on Wednesday to restore order, the source added.

In one video, angry workers surrounded a silent, shot manager in a conference room to air their grievances and question their Covid test results. The date of the meeting was unclear.

‘I’m really scared of this place, we could all be Covid positive now,’ said one male worker. “You are sending us to death,” another person said.

A Foxconn representative declined to comment on the incident.

The rare cases of violence at the factory in the central city of Zhengzhou reflect a buildup of tensions since the lockdown began in October. Many of the vast workforce of more than 200,000 people in “iPhone City” have been plunged into isolation, forced to subsist on spartan meals and scrounge on medicine.

Many finally fled the factory on foot last month. Foxconn and the local government appear to have the situation under control in recent weeks, promising unusually high salaries to attract new employees and promising better working conditions.

Wednesday morning’s protests suggest that is no longer the case. It underscores how Xi Jinping’s Covid Zero policy, which relies on rapid lockdowns to eradicate the disease wherever it appears, is increasingly straining the economy and disrupting entire swaths of the global supply chain. Beijing recently issued new guidelines ordering officials to minimize disruption and use more targeted Covid checks, but surging outbreaks in major cities have forced local authorities to reach for tough restrictions again.

“It’s really a mess,” said Barry Naughton, a professor at the University of California, San Diego, who specializes in Chinese economics. “They have created a situation where local decision-makers are under intolerable pressure.”

The offshore yuan fell after Bloomberg’s report, extending losses and making it Asia’s worst performance on Wednesday.

The Chinese currency “underperforms its other Asian FX peers on reports of protests at Foxconn’s Zhengzhou factory that supplies Apple products,” wrote Stephen Innes, managing partner at SPI Asset Management in a note. . “However, a broader and more optimistic interpretation is that China is reaching the limits of ‘Covid zero’ and authorities’ efforts to ease restrictions will continue.”

Violence has erupted sporadically across China over Covid restrictions. In May, hundreds of workers clashed with security personnel at the Quanta Computer Inc. factory in Shanghai after months of being banned from contact with the outside world, as protests erupted in areas closed in Guangdong, the manufacturing center of the south.

Foxconn’s situation is yet another reminder of the dangers for Apple of relying on a vast China-centric production machine at a time of unpredictable politics and uncertain trade relations.

Zhengzhou is Apple’s most critical production site, producing around four out of five of its latest-generation handsets and the vast majority of the top-end iPhone 14 Pro units. Apple warned this month that shipments of its new high-end iPhones would fall short of expectations, just ahead of the peak in holiday season purchases.

The sprawling complex has operated for weeks in a “closed loop”, or self-contained bubble that limits contact with the outside world. This helps to maintain a certain production. Apple and Foxconn said they are working to replace departing staff and resume full production as soon as possible.

Naughton, the professor, said Beijing was exerting intense pressure on local officials to achieve conflicting goals.

“The tension is that Beijing wants both Covid Zero and full economic growth,” he said. “It’s kind of impossible.

With help from Rachel Chang and Wenjin Lv/Bloomberg.

Picture credits: Bloomberg

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