Shanghai factories face challenges despite work resumption efforts

Staff at SAIC Motor’s Lingang factory in Shanghai line up to register ahead of nucleic acid testing on April 23, 2022. More than 4,000 staff face closed production. Many key companies have resumed work and production in the city. Photo: cnsphoto

Shanghai factories, ranging from automakers to heavy industrial enterprises, have begun to resume production over the past week as the city mounts a massive back-to-work campaign for the manufacturing sector while ensuring epidemic controls, after authorities pressed the pause button on the bustling metropolis. end of March.

But a full recovery of the sector is hampered by factors such as different local anti-epidemic measures, resource shortages and stalled logistics. Many companies’ return to work rate is still below or near 50%, according to insiders and industry experts on Sunday.

The Shanghai municipal government has whitelisted 666 companies that would be prioritized for resuming production. The list is mainly made up of car and auto parts factories, heavy industry companies, medical companies and high-tech companies.

Local officials revealed at a press conference on Friday that around 70% of the 666 companies had resumed production.

An employee of the Shanghai Boiler Works Co told the Global Times on Sunday that after the whitelist was released, hundreds of workers asked to return to work, but local authorities only let about 80 people return. work, mainly assembly line workers.

These people, plus about 800 workers who have worked in the closed-loop plant over the past few weeks, mean that the plant’s return to work rate is around 45%.

US electric car maker Tesla told the Global Times that around 8,000 employees have returned to their jobs at the company’s Shanghai Gigafactory 3 plant. percent.

Zhang Xiang, a researcher at the Automotive Industry Innovation Research Center of North China University of Technology, told the Global Times on Sunday that Tesla’s phase two factory in Shanghai, which makes cars of model Y, has resumed production, while the phase one plant has not. Employees work in one team instead of two as usual.

The Sany Heavy Machinery Industrial Park in Shanghai’s Lingang area has resumed production, but the recovery rate is only about 20 percent, reported Thursday.

Some factories are still preparing to restart. Shipbuilder Jiangnan Shipyard Group Co, which is located on Changxing Island in Shanghai, conducted a stress test for work resumption on Saturday, according to a report by

The test included catering, accommodation, emergency response plans, and more. The company will only restart production gradually if the test does not produce any unexpected results.

According to Zhang, there are still three major obstacles hindering the resumption of production in the Yangtze River Delta region, which includes Shanghai: a lack of resources, logistical blockages and the inability of workers to leave their homes due to the coronavirus. outbreak of COVID-19.

“Resources and personnel flows are limited by different policies of local governments and must meet certain requirements to reach their destinations, which significantly hampers the resumption of production,” Zhang said.

The Shanghai boiler room employee also said that many workers are still confined to their neighborhoods and that traffic does not flow freely between different neighborhoods, which means that workers who live far from the factory will not be able to get to the factory.

“Resources are also lacking. There is not enough food in the factory, and workers have to eat instant noodles repeatedly. Labor resources like writing sheets are also lacking,” he said. declared.

But he pointed out that the company has provided a lot of support for employees, such as setting up hundreds of cots for on-site workers and handing out food parcels to employees.

A small Shanghai-based vehicle supplier told the Global Times that tangled logistics channels are a major problem weighing on getting back to work.

“Many key materials cannot enter or leave Shanghai. The logistics companies we used to cooperate with have suspended their operations,” a person from the company said.

Chen Jia, a researcher at the International Monetary Institute of Renmin University of China, told the Global Times that the work resumption of the first batch of whitelisted companies in Shanghai is progressing smoothly, but there are still problems to come. be solved in the logistics sector. .

“The resumption of work of the whole industrial chain requires the cooperation of each local community in Shanghai and the same pace of other neighboring provinces to move forward together, which is why China is accelerating the establishment of a unified domestic market,” Chen said.

He also noted that rising logistics costs and congested highways and ports have been a major challenge to resuming production.

Since mid-March, Shanghai has administered 655 sea-rail combined transport trains that carried 84,000 standard containers, up 42% year-on-year to meet import cargo transportation demands and export between cities in the Yangtze River Delta region and Port of Shanghai.

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