US companies in China attempt to restart production

American companies with operations in China are striving to resume work amid the coronavirus outbreak, according to a Tuesday report from financial news outlet Yicai.

At electric car maker Tesla's gigafactory in Shanghai, more than 1,000 employees have returned to work, accounting for one-third of its total employees, the report said. After resumption, production capacity can be restored by 50 to 60 percent, and it is expected to take one month to achieve full capacity recovery.

Honeywell, a US-based conglomerate providing a wide range of commercial goods and engineering services, said its 21 factories in China have all resumed work, and some factories have reached 100 percent resumption, according to the report.

Tech giant Apple is facing a slower-than-anticipated return to production and iPhone supply will be temporarily constrained, according to a statement from the company on Feb 17.

Changshuo Technology, a key Apple product original equipment manufacturer which is reported to handle about 40 percent of iPhone production, is short of hands at its plant in Pudong, Shanghai, the report said, citing a person familiar with the matter. It is difficult for workers across the country to return to their jobs, and the factory has to recruit workers exclusively from the Yangtze River Delta region to fill the gaps. To add another difficulty, workers can go to their jobs only after 14 days of quarantine.

However, the Chinese government has promised to support companies and industries which have been hit hard by the epidemic, the report said, and a large portion of which is manufacturing. Measures include reducing bank lending rates and improving tolerance for bad debts for qualified firms, and some companies can enjoy corresponding tax deductions.

In a recent survey released by the American Chamber of Commerce in Shanghai (AmCham) on Feb 17, nearly half of surveyed US companies in China claim their global operations have been affected by business closures caused by the epidemic, and another half said the effects will be felt in the next month. Some 78 percent of companies surveyed said they do not have enough staff to return to full production due to travel restrictions of employees.