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Updates on Chinese Factory Operations After COVID-19

By: Bonnic Chung
Mar 28

The outbreak of COVID-19 has become the "lifeline for mankind" as it poses a challenge to people, communities, and the economy. We all need to work together during these turbulent times. 

The lockdown of China led to several facilities expanding their shutdowns for the Lunar New Year. This meant that several factories were either completely closed or operating at a limited capacity. With the number of reported infections plummeting every day, more factories are reopening once they gain approval from local authorities. As of March 18, inter-provincial transportation in China is back to normal. There has been an easing of the self-quarantine policy in most cities except Qingdao, Dalian, Tianjin after domestic travel.  

In the past two weeks, WRAP Hong Kong has contacted 60 factories in China to find out its status on workers resuming to work and precaution measures on virus contagion. Our findings show: 

  • All of the respondents said their factories reopened by mid-March, while 70% already restarted their operations in mid-February.   

 

  • Only nine factories reached 100% of planned capacity. In comparison, 43 factories reached between 70-90%, 5 of them reached nearly 50% to 70% after restarting operations, 5 reached less than 50%. 70% of facilities expect to be at full capacity by the end of March, 

 

  • Fifty-five factories (91.7%) replied that only workers returning from Wuhan require a full 14-day quarantine.

 

  • Thirteen factories experienced shipping delays for materials. 6 of these facilities expected the supplies could be back to normal by April, while the remaining have no idea on the timeline. 

 

  • 100% of surveyed factories provide hand sanitizers and temperature measurements to all workers. Over 70% of facilities measure workers' temperature before entering the factories and during lunchtime. 30% also took the employee's temperature when they finished their working day. The same preventive measures applied to all external visitors, along with providing their QR code showing their health status. 

 

  • Masks are provided to workers by all facilities. 80% of responding locations will offer it daily, 30% will alternate. Only two respondents experienced difficulties in purchasing the masks.

 

  • Other preventive measures including allowing more social distancing during lunch at the canteen, sterilizing the plant daily, and provide regular training on the importance of personal hygiene.

 

Meanwhile, a buyer survey was conducted in the same period to understand their arrangements on travel plans, factory audits, and shipment deliveries. A total of 22 responses were received from brands and retailers. 

 

Findings:

 

  • Travel Plans: Of the 22 respondents, 55% ceased all business travel until the 14-day self-quarantine requirement ended for travel between China and Hong Kong, 36% will review their travel arrangements in April, and 9% have resumed travel.

 

  • Allow gaps between audit cycle?: More than 90% of the respondents said they would allow gaps between audit cycles. One brand mentioned that their factory could only start production after an audit. At the same time, other brands said that they wouldn't accept an audit delay. 

 

  • Accept on shipment delay?  A majority (77%) are expecting some shipment delay. Out of Seventeen respondents, nine will discuss the shipment deliveries on a case by case basis. One is considering canceling an order while another one will change the shipment by freight with cost bearing between the buyer and factory.  

 

We will continue updating the status of Chinese factories. Coronavirus infections around the world are still on the rise. Despite progress on developing a vaccine, sheltering in place remains the best way to slow the spread of the virus, as well as to follow the World Health Organization (WHO) guidance to protect personal health. 

 

We are confident that we will get this through by working together and get back to our regular life. Maybe this trauma will help us to think about how we interact with the world and perhaps refocus on the essentials. 

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