China faces its worst covid-19 outbreak since 2020 0:49
Hong Kong (CNN Business) --
Foxconn, one of Apple's biggest suppliers, has suspended operations in Shenzhen as China declares a lockdown of the tech hub and other regions to contain the country's worst Covid-19 outbreak in two years.
The world's second-largest economy continues to stubbornly pursue its zero-Covid strategy, even as other nations reopen and try to live with the virus.
Lockdowns in major Chinese cities will not only affect the country's recovery from the pandemic, but could deal a further blow to global supply chains.
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The city of Shenzhen lies to the south and borders Hong Kong, home to Chinese tech giants like Tencent and Huawei.
It imposed a week-long lockdown starting Monday, after registering 66 positive cases on Saturday.
Foxconn told CNN Business on Monday that the "factory resumption date will be advised by the local government."
Foxconn has two large facilities in Shenzhen.
The Taiwanese company "adjusted" its production line to other sites to "minimize the potential impact" of the outage, he added.
He did not detail which locations would take on the extra work.
Shares of Taipei-based Foxconnect Interconnect Technology and a subsidiary of Foxconn plunged 9.8% in Hong Kong on Monday.
China is dealing with its worst Covid outbreak since the original outbreak in Wuhan in early 2020, at a time when cases are rising across the country.
On Sunday it reported 2,125 local cases of covid-19 in 58 cities, according to the National Health Commission (NHC).
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In Shenzhen, all businesses apart from those deemed essential or dedicated to supplying Hong Kong have suspended operations or have implemented work-from-home policies.
Public transportation, including subways and buses, was suspended in the city of 17.5 million people.
Shenzhen is also home to one of the world's largest container ports, and any disruption to it could hit an already stressed global supply chain.
Last summer, the Yantian port in Shenzhen was forced to close for almost a week after infections were detected among dock workers, leading to a huge backlog of goods that took months to clear and an increase of world freight rates.
So far the port is still working.
Shares of major Shenzhen-based companies performed poorly in Hong Kong on Monday.
Tencent fell 9.8%.
Telecommunications company ZTE lost 7%.
BYD, China's largest electric car maker, fell 8.3%.
And AAC Technologies, maker of audio components, plummeted 9%.
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In addition to Shenzhen, local authorities have also shut down the Changchun industrial hub in the northeast from Friday, where nine million residents have been banned from leaving their neighborhoods.
Shanghai, the country's biggest business hub, has imposed strict measures after a spike in Covid cases, closing schools and cinemas and restricting travel to the city.
These lockdowns come just months after China closed down Xi'an, a city in the country's northwest, affecting major business operations including Samsung and Micron, two of the world's largest chipmakers.
The strict measures taken to control the pandemic have hit China's economy hard in recent times.
Earlier this month, the government set an economic growth target of around 5.5% for 2022, the lowest official target in decades.
-- CNN's Beijing bureau contributed to this report.
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