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Many Japanese Factories in Shanghai Unable to Resume Work

Numerous companies said setting up a ‘closed-loop system’ where workers can eat and sleep after working at a factory is an “onerous demand” they cannot achieve

Weak demand and Covid outbreaks weigh on factory activity in China, according to a private poll by Caixin of smaller exporters showed on Monday.
Employees wearing face masks work on a car seat assembly line at Yanfeng Adient factory in Shanghai, February 24, 2020. File photo: Aly Song, Reuters.


Japanese firms in Shanghai have had trouble reopening their factories amid the long Covid lockdown – which is now in its fifth week.

Many companies say they have been unable to set up a ‘closed-loop system’ because of the “onerous demands” needed to allow workers to eat and sleep at their factories, as well as work there.

The Shanghai Japanese Commerce & Industry Club said on Thursday that 63% of the 54 firms that responded to a survey it conducted from April 27-30 said their factories had yet to resume operations.

The survey shows the difficulty the municipal government has faced in helping key businesses resume production amid the ongoing strict lockdown in the city of 25 million.

Out of the 37% that have resumed operations, over three-quarters said production was at or below 30% of normal levels.

The Japanese industry club has over 2,300 members, according to its website.


ALSO SEE: Shanghai Reports Declining Covid-19 Cases as Leaders Back Policy


‘Closed Loop’ System

The key difficulty that firms face is the government’s requirement that they implement “closed loop management” to reopen, a process akin to a bubble-like arrangement, where workers sleep, live and work in isolation to prevent virus transmission.

This was especially difficult for factories without dormitories on site and many employees still faced movement restrictions, the club said.

“A condition for an operation permit is that it requires a sealed-off life at the factory but then there are problems with bathing, sleeping, eating – it is impossible to live,” the survey said.

“The zero-Covid policy has a negative impact on personnel interactions, logistics, the ability to work,” it said.


Tough Requirements

Shanghai implemented a city-wide lockdown on April 1 at the behest of the central government, which has stuck with a zero-tolerance policy to eliminate Covid-19 as it battles China’s worst outbreak since the virus first emerged in Wuhan in late 2019.

While authorities in the economic hub have said that they are eager to help businesses reopen and have drawn up a priority list of close to 2,000 companies, business chambers and companies say the tough requirements have made it difficult to restart work.

The European Chamber of Commerce in China published the results of a member survey on Thursday revealing that almost a quarter of respondents were considering moving current or planned investments out of China, more than double the number at the start of the year.


• Reuters with additional editing by Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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