As factories in China start firing up assembly lines again they will be confronted with U.S. protocols in place to contain the coronavirus, according to an Associated Press report on Thursday (March 19).
“A sustained disruption of activity in the U.S. will likely lead to disruptions to manufacturing activity in China,” Darren Tay, a country risk analyst for Fitch Solutions told the AP.
In order for China to restart production of electronic devices like smartphones and computers, it will have to get shipments of chips and other parts from the U.S.
Over 80 percent of smartphones and 50 percent of computers are assembled in China. Chinese factories also put together appliances.
As Beijing rolls back mandates instituted to contain the virus, factories are starting to re-establish supply chains to obtain auto parts, chips and other hardware.
A survey conducted March 9 to 14 by the American Chamber of Commerce in South China (AmCham South China) indicated that one in six Chinese businesses that rely on chips and other parts are either out or low.
“The human toll of the virus is not the only major problem at hand,” Harley Seyedin, president of AmCham South China, said in a statement. “It is becoming increasingly clear that restarting China, the world’s largest manufacturer and a giant of global trade will be difficult even as the country makes major strides to contain the outbreak.”
A little more than 50 percent of the 237 businesses participating in the survey were American and 75 percent were manufacturers. Every company surveyed said it was experiencing “some impact” because of coronavirus-related supply chain issues.
Foxconn in China said it is up and running again and expects to be back to fully assembling Apple products at normal levels by the end of March.
Over half of its seasonal employees who were off work due to the coronavirus are now back to work.