China's main manufacturing hubs reboot after COVID-19 shutdown

China's main manufacturing hubs reboot after COVID-19 shutdown

Traders buy and sell chips and components on the streets of Huaqiangbei following an outbreak of th
FILE PHOTO: Traders buy and sell chips and components on the streets of Huaqiangbei, the world's largest electronics market, following an outbreak of the novel coronavirus in the country, in Shenzhen, Guangdong province, China Feb 18, 2020. (Photo: REUTERS/David Kirton)

BEIJING: As many parts of China ease coronavirus travel curbs, main manufacturing hubs in the east and south are seeing hundreds of thousands of migrant workers returning to work and more traffic on the roads during rush hours.

Mainland China reported nine new coronavirus cases outside the epicentre of Hubei on Monday (Feb 24), the lowest since the national health authority started publishing nationwide daily figures on Jan 20.

Several provinces have lowered their coronavirus emergency response measures, allowing more flexibility on transportation and helping firms resume production.

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About 180 million workers have left their hometowns to return to work since Feb 10, when China ended the prolonged Lunar New Year holiday due to the virus outbreak, according to Reuters calculations based on transportation ministry data.

At the current daily travel flow rate of more than 14 million people, about 192 million people are likely to return to cities where they work during the last two weeks in February, beating a government projection of 120 million.

Data compiled by China's internet giant Baidu Inc shows that Guangdong province, an economic and export powerhouse in the south, and Zhejiang province, a major manufacturing hub for textile and machines in the east, are seeing significantly more inflows of migrant workers since last week.

Guangdong government said it has sent nearly 200 chartered trains in the past two weeks to bring more than 6,000 migrant workers back from their inland hometowns.

"Guangdong is prioritising production resumption at information technology, automobile, petrochemicals and household appliances firms ... especially Huawei, ZTE, Midea and GAC Group," said a senior Guangdong official at a press briefing on Saturday.

Shenzhen, headquarters of Huawei and known as China's Silicon Valley, has seen migrant flows picking up to the highest level after the Chinese New Year holiday, although it is still well below travel flows during peak days last year.

Urban transport in Shenzhen also shows a sharp rise this week. According to Shenzhen traffic police data, 420,900 cars were tracked on roads during morning peak hours on Monday, up 58 per cent compared to the same period last week.

That remains 40 per cent less traffic than a normal Monday before the coronavirus outbreak, as Chinese authorities are still encouraging employees to work remotely to reduce the risk of virus spread.

Location technology firm TOMTOM's traffic index also shows a climb in congestion levels in Shenzhen and other major cities, including the capital Beijing and financial center Shanghai, this week.

Guangdong province added 30,000 firms to its business resumption list last week, compared to only 12,000 firms the week before.

Even as companies return to work, production levels remain behind what they would normally be due to supply chain disruptions, curbed demand, and spotty labour shortages.

Foxconn, one of the most important contract manufacturers for Apple Inc has yet to resume production at full capacity. The iPhone maker recently lowered its revenue guidance for the quarter due to sourcing and production issues in China.

China Southern Power Grid, power supplier of Guangdong, said the province consumed 5.58 billion kilowatt-hours electricity in the week of Feb 16, up 17.3 per cent from the week of Feb 9. Power consumption at industrial firms rose 62.1 per cent on the week, and rose 15 per cent at information technology firms.

The grid has not yet revealed the power data for the week of Feb 23.

Daily coal consumption at six major coal-fired power groups across China rose to 427,000 tonnes on Monday, the highest level for nearly a month, but still 34 per cent lower than the same period last year.

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Source: Reuters/nr

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