As unrest in China over covid-19 restrictions comes to a head, the chorus of calls for Chinese President Xi Jinping’s resignation intensifies, leading to what observers have called larger protests in the country since then. Tiananmen in 1989.
Following protests at Apple’s supplier Foxconn factory in Zhengzhou last week, new sparks of unrest in a country where residents have been subjected to arbitrary and sudden restrictions for two years ignited in various areas. Triggered by an apartment fire in Urumqi which last claimed 10 lives, protests erupted in Wuhan, Chengdu and parts of the capital Beijing over the weekend. Hundreds of protesters ran intothe police in Shanghai.
The repercussions are felt at all levels. The mix of protests and covid restrictions threatens to further slow economic activity and suppress demand for energy, food, and raw materials.
Today (28 November), oil prices fell to their the lowest in 2022 amid lukewarm demand from the world’s largest crude oil importer. The yuan reached a two week low. The country’s stock markets, which were already in trouble amid Jinping’s attempts to consolidate power, sank. Commodities—which surge when curbs are relaxed— have seen their prices drop after a wide sale.
Mapping: What drives oil prices down
Stocks and commodities are sinking, by the numbers
4%: How much Hong Kong’s Hang Sha index fell today (Nov 28), before paring losses. It ended down 1.6%. The Shanghai Stock Exchange, the S&P Asian Index based in Australia, Kospi in South Korea and Nikkei in Japan also felt the blow
1.8%: Chinese copper futures fall
3%: Cooking oil futures in Dalian fell on concerns over the threat to demand from already struggling restaurants and hotels
3%: Industrial profits down year-over-year in the first 10 months of the year
What’s going on with iPhone production now?
Apple has tried to wean itself from total dependence on China. This started to produce iPhone 14 in India much sooner than usual (but just the base version, not the Pro or Pro Max versions). It was also stimulate production In Vietnam. But catching up with the factory of the world is a slow and arduous process.
The majority of handsets from the Cupertino phone maker are still made in China. Unrest at Foxconn’s factory in Zhengzhou, the ‘iPhone city’ with more than 200,000 workers, will reached 30% supply. Desperate to retain staff, the establishment is offering bonuses of $1,800.
The high-end versions – the iPhone 14 Pro and Pro max – are exclusively produced in Zhengzhou. “That suggests to me that high-end iPhones have a different set of production processes, which isn’t very easy to transfer elsewhere,” said Martin Yang, senior emerging technologies analyst at investment firm Oppenheimer. told CNBC Asia street signs. “And often that refers to highly customized equipment and skilled labor that isn’t readily available elsewhere.”
Can China recover?
If China continues to tighten its grip on its people and trade, investors become more risk averse.
Listening to protesters’ demands could help stewards of China’s economy decide on next steps, providing more clarity and assurance.
“The protests could also be the catalyst that leads to a positive outcome by getting the government to set a clearer game plan for how the country is going to learn to live with covid, setting a more transparent timetable and speeding up the process. china’s transition to life with covid. “, Robert Subbaraman, chief economist of the Japanese financial services group Nomura, told Reuters.
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