Apple: Foxconn manufacturers urge Chinese officials to ease COVID policies
Amid supply chain difficulties stemming from China's zero-COVID policy, Foxconn's founder reportedly urged Chinese leaders to ease some of the country's guidelines.
DAVE BRIGGS: Let's check on shares of Apple now. They are up, as you can see, just about 1%. Still down, though, more than 20% this year, largely on production issues related to China COVID lockdowns, speaking of. And there are some fascinating news on that front, from the Wall Street Journal. The company is not only the most valuable in the world, it's apparently equally influential. A letter from the founder of Foxconn, the world's largest iPhone maker, played a role in persuading the Chinese government to loosen its COVID-zero policy.
Terry Gu warning a month ago that the country's strict controls could threaten its position in the global supply chain. Recent worker protests at the Foxconn factory in zhengzhou may have lit the fuse for those protests that spread around the entire country, and then some, in fact, in the extreme cases, even called for President Xi Jinping to resign. This is some really intriguing commentary from the Wall Street Journal that you don't expect either side to comment on, needless to say, but speaks to the massive influence of these phones that we keep in our hands all day.
SEANA SMITH: It certainly does. And I don't think it's a surprise to anyone that Foxconn's founder might have reportedly got involved in this because we already heard that Apple is starting to shift its production elsewhere out of China. A number of large US companies have been affected by the lockdowns in China in terms of their supply, Nike being one of them. Adidas, Volkswagen, Samsung, just some of those companies that have had their supply disrupted over the last two years because of China's zero-COVID policy.
It's interesting, though, just, when you take a step back, exactly what you're saying, Dave, the influence of one person and one device, more specifically, and what that would mean for a nation of millions and millions and millions of people.
DAVE BRIGGS: And just a little context here, when you follow the Chinese economy, you know that Xi Jinping has really cracked down on those major tech leaders, tech conglomerates. So it's not as though he's afraid to take a hit in the Chinese economy. He has shown exactly the opposite-- a complete willingness to take a hit to their GDP and their tech sector to do exactly what he wants, which is crack down, which is enforce that COVID-zero policy. Really hasn't budged until now. Hail the power of Apple.
SEANA SMITH: Yeah, certainly, and we've talked about it a number of times also with China's experts, just in terms of how hard of a line he did approach, how he was able-- or how he was willing, I should say, to take that economic hit and put health as the front and foremost most important issue in China.
Their rhetoric and their newspapers are also changing, just in terms of the latest variants, how-- I guess, how much we shouldn't be as concerned as we should have been during Delta or some of the more serious versions of COVID. So the next couple of weeks is going to be very interesting in China, whether or not we could actually buy the fact that they are going to roll back their zero-COVID policy and leave that in place.
DAVE BRIGGS: Because they are not prepared for a potential spike in cases because of their lack of vaccines and anything related to an mRNA vaccine. So, yeah, not out of the woods just yet.