[Asia Economy Reporter Jeong Hyunjin] The Wall Street Journal (WSJ) reported on the 8th (local time) that Taiwan's Foxconn, Apple's largest partner, appears to have played a significant role in China's de facto abandonment of its 'Zero-COVID' policy. It is interpreted that Foxconn's founder, feeling a sense of crisis over Apple's move to leave China, directly sent a letter to Chinese authorities, influencing the quarantine policy.
On the 8th (local time), WSJ cited sources saying that Terry Gou, Foxconn's founder, sent a letter last month to the Chinese Communist Party leadership warning that if the Zero-COVID policy continued, China's economy would be damaged. Gou warned that sticking to the quarantine policy could shake China's central position in the global supply chain and reportedly demanded increased transparency regarding the quarantine issues of workers at Foxconn's factories in China.
The reason Gou personally sent the letter was that at the time, Foxconn's Zhengzhou factory in China experienced a massive workforce exodus due to the impact of COVID-19, and chaos and production disruptions continued as workers protested against the quarantine policy. WSJ analyzed that the anti-Zero-COVID protests across China following Gou's letter also influenced the Chinese Communist Party leadership's change in direction.
It is reported that officials within the Chinese government who had advocated for easing quarantine measures used Gou's letter to attempt a shift in the Zero-COVID policy.
Foxconn plays a key role in China's economy. Last year, Foxconn accounted for 3.9% of China's total exports. In 2019, the Zhengzhou factory alone exported products worth $32 billion (approximately 41.6 trillion KRW). Foxconn employs over one million people across China.
However, due to recent disruptions in iPhone production caused by the Zero-COVID policy, Apple has accelerated its plan to relocate production from China to other Asian countries such as India and Vietnam, putting Foxconn in a situation where it inevitably feels a sense of crisis. Apple is also reportedly planning to reduce its dependence on Foxconn, its largest partner.
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