Foxconn founder pushed China to loosen COVID-19 restrictions, says report

Wall Street Journal has reported that it was Foxconn founder Terry Gou who pushed China to move away from its zero-Covid policy and loosen restrictions. Gou apparently warned Beijing that the strict stance of COVID-19 threatens its position as the world's second-largest economy in the global supply chain.

Gou's letter, written over a month back, played an important role in convincing China's leadership to quickly reopen the economy and make changes to its COVID-19 policy, as per the report.

While Gou's office has "sternly" denied the report, Foxconn declined to comment on the matter. Notably, Gou no longer plays an active role in the company after retiring in 2019. However, he still wields influence over its matters.

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The Zhengzhou plant had been marred by a month-long unrest in November, with reports doing the rounds that workers were fleeing the factory for unsanitary conditions and lack of resources amid a COVID outbreak. "Closed-loop" management curbs were lifted at the plant on Thursday.

The company then asked the workers to stay and promised them four times the current bonus. It also hired new employees but later failed to deliver on the promise, leading to violent unrest. The workers were then asked to leave.

Strict COVID restrictions at the plant led to an 11.4 per cent year-on-year drop in November revenue. Apple also issued a statement saying that production is suffering and people will have to wait longer for their devices. Notably, the plant is the biggest manufacturer of iPhones. Some Wall Street analysts cut their iPhone shipment targets for the all-important holiday quarter.

Chinese health officials and government advisers took the opportunity and used Gou's letter to push the case that the government needed to speed up its efforts to ease its tough COVID-19 controls, the report added.

Earlier this week, China loosened several of its restrictions and allowed for home quarantine, lenient testing rules and largely scrapped the health codes people needed to show on their phones to enter public places.

(With inputs from agencies)

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