China's COVID controls hits Shanghai Disney and iPhone output
Hu Chengwei/Getty Images News

China's zero-COVID policy is on full display at Shanghai Disneyland (NYSE:DIS), with visitors temporarily barred from leaving the resort until they were tested for coronavirus. The park was locked down after a single guest tested positive for an infection, a similar event that happened in late 2021, and follows a two-month closure during Shanghai's lockdown earlier this year. Anyone who visited Disneyland since Oct. 27 will need to test for COVID three times over three days, while its main theme park and attached shopping street, will be shuttered until further notice to comply with virus curbs.
Elsewhere: Some turmoil has erupted in the central city of Zhengzhou, particularly at the world's largest iPhone factory. Apple-supplier Foxconn (OTCPK:FXCOF) employs about 200,000 people at the Zhengzhou complex, which includes dormitory accommodation for workers, but discontent has been growing following an outbreak and strict COVID controls. Foxconn said it has implemented "closed loop management," the official term for employees living at their workplace and having no outside contact, prompting thousands to flee, with some even scaling fences of the facility to escape.
Sources told Reuters that production of the iPhone 14 (NASDAQ:AAPL) could plunge by as much as 30% in November due to tightening COVID restrictions, with Foxconn (OTCPK:FXCOF) working to boost production at another factory in Shenzhen to make up for the shortfall before the holiday season. Foxconn (OTCPK:FXCOF), which produces 70% of iPhones globally, also builds the device in India, but its Zhengzhou factory assembles the majority of its global output.
Go deeper: Since the 20th National Party Congress last month, China's Communist Party has only doubled down on the draconian COVID measures, which seek to eliminate outbreaks as soon as they occur despite the economic cost. Leader Xi Jinping has touted the policy as "protecting the peopleâs health and safety to the greatest extent possible," while "encouraging achievements in both epidemic response and economic and social development."