Articles

Factories Facing “Severe” Labor Shortages In China, U.S. Business Group Says
February 17, 2020

By: Russell Flannery
Forbes, Feb. 17, 2020

Some 78% of companies that participated in a new survey by the American Chamber of Commerce in Shanghai said they don’t have enough workers to run a full production line in the mainland.

Nearly half of the 109 companies — 48% of the total– from Shanghai, Suzhou, Nanjing and the Yangtze River Delta said their global supply chain operations have already impacted amid China’s deadly corona-virus outbreak. The survey was conducted Feb. 11-14.

"The biggest problem is lack of workers as they are subjected to travel restrictions and quarantines,” said Amcham Shanghai President Ker Gibbs in a statement. "Anyone coming from outside the immediate area undergoes a 14-day quarantine. Therefore, most factories have a severe shortage of workers, even after they are allowed to open. This is going to have a severe impact on global supply chains that is only beginning to show up.”

A lack of staff — 41% — was identified by respondents as the biggest challenge in the next two to four weeks, followed by logistics at 30%, Amcham Shanghai said.

Over the next few months, some 58% of companies expect demand for their output to be lower than normal, a sign that China’s economy will be hurt by fallout from the corona-virus outbreak, Amcham said.

China in the past three decades has emerged as a "factory to the world,” supplying global businesses from Apple to GM. The Wall Street Journal yesterday said in a story titled "Virus Disrupts Auto Supply Chain” that Nissan, Hyundai, Fiat Chrysler and Renault were facing problems getting parts from China.

The Amcham Shanghai survey found that 38% of companies do not have sufficient masks and other supplies to protect their staff from corona-virus infection.

Forbes