Media: Western companies will move factories to India due to COVID in China

Another surge in the incidence of COVID-19 in China has led to a shortage of employees at the factories of Western companies in the country and a violation of production plans, due to which foreign businesses will transfer enterprises abroad, writes Financial Times with reference to interviewed experts.

The explosive growth of infections in China has threatened the Apple production chain. Earlier, analysts at the Swiss bank UBS predicted a 16 million iPhone14 production cut this year due to restrictions in the city of Zhengzhou. That is, the release of the iPhone compared to last year will collapse by 20%.

According to Prabhu Rama, an analyst at India’s CyberMedia Research, India currently accounts for about eight percent of iPhone production, but Taiwanese suppliers, including Foxconn, intend to increase this figure to 18% by 2024. This is necessary to reduce dependence on China.

The head of the American research group Resilinc, Bindiya Vakil, in turn, added that due to the rampant coronavirus in China, production, trade and logistics chains will be disrupted, which will hit the production of technological products and their sales in world markets.

Now more than 90% of all iPhones are assembled in China, the FT noted. At the same time, South Korean Samsung left the country three years ago, moving production to other countries.

Recently, Bloomberg reported on the apocalyptic surge in the incidence of COVID-19 in China. So, according to the agency, up to 37 million infections can be recorded daily in the country. In total, since the beginning of December, the infection has affected 250 million people, or 18% of the population.

Experts explained such statistics by the abolition of the zero covid policy: the country did not develop herd immunity, which led to an explosive increase in the incidence.