Shanghai Workers Cheer as Covid Lockdown Ends; No More Bunking at the Office

“I’m very happy to go back home. Living and working at the office was a very unusual experience,” said Lily Hui, who spent almost two weeks hunkered down with around 20 of her colleagues at a pharmaceutical company in eastern Shanghai. They slept on military-camp beds next to their desks, in conference rooms or corridors. Evenings were spent playing cards or watching TV series.

Companies deemed critical, such as auto makers and chip producers, have been on a whitelist system that allowed them to operate under a “closed loop” throughout the citywide lockdown. Employees could either live at their workplace or commute to work after applying for a “return-to-work permit” with neighborhood officials. Other companies required their staff to stay at their workplace to keep business going, meaning some had to sacrifice being with their families.

Western Leadbank FMC, a state-backed mutual-fund management firm, is allowing around 30 fund managers and employees cooped up in the office since late March to go home at the end of Thursday. “People are obviously excited. After all, the living conditions in the office have been tough,” the company’s spokeswoman said.

The firm is asking another batch of essential staff to move into the office next Monday, for two weeks of working in isolation, before rolling out a rotation arrangement later in June, when people will commute between home and work daily.

The Shanghai government is encouraging people to go back to work with dozens of incentives in an effort to revitalize China’s most important commercial and manufacturing hub, including offering rent waivers and tax breaks for employers. Shanghai’s lockdown—which affected all the city’s 25 million residents—has contributed to slower national growth, flagging retail sales and also sent shock waves through global supply chains. Analysts say it has knocked tens of billions of dollars off global trade, especially in clothing, textiles and cars.

As of Wednesday, some 650,000 people in zones still considered high-risk were yet to be released. New locally transmitted Covid-19 cases in China’s biggest city dropped to 10 on Wednesday, from a peak of more than 20,000 a day in April. Some other parts of China remain under lockdown.

Shanghai’s role in global trade is recovering. Daily container throughput at its port reached about 95% of its normal capacity by the last week of May, and Pudong Airport, the city’s main international airport, was handling about 80% of its pre-Covid lockdown cargo levels, transport ministry data show.

Despite a sense of relief throughout Shanghai, foreign businesses remain unnerved by uncertainties over China’s stringent policies to quash Covid outbreaks. Businesses are planning shorter term, sometimes in daily cycles instead of projecting weeks ahead, said Steven Lynch, managing director of the British Chamber of Commerce in China.

Tesla Inc., a whitelisted manufacturer that resumed operations weeks ago, is only expected to restore full production at its Shanghai Gigafactory, its largest factory globally, by the end of June, according to people familiar with the matter. Last week, more Tesla workers were brought back to the closed-loop factory premises, where they both live and work, according to the people. The factory is operating at about 70% capacity, in part because of problems with shipping parts from other provinces, one of the people said.

Tesla didn’t respond to a request for comment.

Many facilities in the eastern Lingang industrial district, where Tesla and China’s biggest state-owned auto maker, SAIC Motor Corp., operate factories, are required to continue in a closed loop until at least mid-June, people familiar with the matter said.

SAIC, which was also whitelisted, on Monday began stress-testing operating two production shifts per day, up from just one. It was back to 80% of its full capacity on Tuesday, the company said on social media.

The whitelist system has allowed manufacturers in key industries to enjoy a head start in recovery. Automotive retail during the third week of May was up by 47% compared with the same period of the previous month, according to China Passenger Car Association data.

It has also led to tensions. Workers at the Shanghai plant of Quanta Computer Inc., which supplies companies including Apple Inc., repeatedly clashed with authorities in May, frustrated that initially those who tested positive for Covid-19 were left in dormitories they shared with other workers for days rather than being taken to central quarantine, according to workers who spoke to The Wall Street Journal. In late May, hundreds of workers demanded to be let back to their hometowns. The company, they said, relented and allowed some to leave, but workers say they still aren’t allowed to leave campus for a day off in Shanghai or to travel elsewhere.

“Once our plant opens to the outside world, I’ll leave and go somewhere else,” said a Quanta worker surnamed Hou. “I’ll never come back to Shanghai again.”

Quanta and Apple didn’t immediately respond to requests for comment. Quanta’s Shanghai plant assembles notebook PCs for Apple as well as products for other brands.

Most companies will take weeks to fully recover, said Erik Zheng, president of the American Chamber of Commerce in Shanghai. That’s because they must procure vendors and equipment to sanitize premises and air-conditioning systems, or set up their own Covid-19 testing facilities.

On Thursday, long queues for some Covid test centers hindered many from quickly getting back to work. Residents need a negative PCR test result within 72 hours to enter certain places including some office buildings.

Chris Torrens, a partner at consulting firm Control Risks, said the company will split its 90 staffers on two rosters. The teams will take turns to work from home and from the office, to help prevent the entire workforce being sent to quarantine if one employee tests positive for Covid.

One commercial building located in Shanghai’s Changning district requires tenants to declare that they have set up Covid monitoring and control measures, such as sterilization for incoming mail and parcels, and storing seven days’ worth of emergency food and necessities. The company will be held liable if Covid infections emerge as a result of noncompliance, a form with the instructions read.

“The biggest concern is if this restart is really sustainable,” said Bettina Schoen-Behanzin, vice president of the European Union Chamber of Commerce. “Because we cannot shut down the site, start up again and then shut down again.”

—Anniek Bao contributed to this article.

Write to Selina Cheng at [email protected], Sha Hua at [email protected] and Yang Jie at [email protected]

“I’m very happy to go back home. Living and working at the office was a very unusual experience,” said Lily Hui, who spent almost two weeks hunkered down with around 20 of her colleagues at a pharmaceutical company in eastern Shanghai. They slept on military-camp beds next to their desks, in conference rooms or corridors. Evenings were spent playing cards or watching TV series.

Companies deemed critical, such as auto makers and chip producers, have been on a whitelist system that allowed them to operate under a “closed loop” throughout the citywide lockdown. Employees could either live at their workplace or commute to work after applying for a “return-to-work permit” with neighborhood officials. Other companies required their staff to stay at their workplace to keep business going, meaning some had to sacrifice being with their families.

Western Leadbank FMC, a state-backed mutual-fund management firm, is allowing around 30 fund managers and employees cooped up in the office since late March to go home at the end of Thursday. “People are obviously excited. After all, the living conditions in the office have been tough,” the company’s spokeswoman said.

The firm is asking another batch of essential staff to move into the office next Monday, for two weeks of working in isolation, before rolling out a rotation arrangement later in June, when people will commute between home and work daily.

The Shanghai government is encouraging people to go back to work with dozens of incentives in an effort to revitalize China’s most important commercial and manufacturing hub, including offering rent waivers and tax breaks for employers. Shanghai’s lockdown—which affected all the city’s 25 million residents—has contributed to slower national growth, flagging retail sales and also sent shock waves through global supply chains. Analysts say it has knocked tens of billions of dollars off global trade, especially in clothing, textiles and cars.

As of Wednesday, some 650,000 people in zones still considered high-risk were yet to be released. New locally transmitted Covid-19 cases in China’s biggest city dropped to 10 on Wednesday, from a peak of more than 20,000 a day in April. Some other parts of China remain under lockdown.

Shanghai’s role in global trade is recovering. Daily container throughput at its port reached about 95% of its normal capacity by the last week of May, and Pudong Airport, the city’s main international airport, was handling about 80% of its pre-Covid lockdown cargo levels, transport ministry data show.

Despite a sense of relief throughout Shanghai, foreign businesses remain unnerved by uncertainties over China’s stringent policies to quash Covid outbreaks. Businesses are planning shorter term, sometimes in daily cycles instead of projecting weeks ahead, said Steven Lynch, managing director of the British Chamber of Commerce in China.

Tesla Inc., a whitelisted manufacturer that resumed operations weeks ago, is only expected to restore full production at its Shanghai Gigafactory, its largest factory globally, by the end of June, according to people familiar with the matter. Last week, more Tesla workers were brought back to the closed-loop factory premises, where they both live and work, according to the people. The factory is operating at about 70% capacity, in part because of problems with shipping parts from other provinces, one of the people said.

Tesla didn’t respond to a request for comment.

Many facilities in the eastern Lingang industrial district, where Tesla and China’s biggest state-owned auto maker, SAIC Motor Corp., operate factories, are required to continue in a closed loop until at least mid-June, people familiar with the matter said.

SAIC, which was also whitelisted, on Monday began stress-testing operating two production shifts per day, up from just one. It was back to 80% of its full capacity on Tuesday, the company said on social media.

The whitelist system has allowed manufacturers in key industries to enjoy a head start in recovery. Automotive retail during the third week of May was up by 47% compared with the same period of the previous month, according to China Passenger Car Association data.

It has also led to tensions. Workers at the Shanghai plant of Quanta Computer Inc., which supplies companies including Apple Inc., repeatedly clashed with authorities in May, frustrated that initially those who tested positive for Covid-19 were left in dormitories they shared with other workers for days rather than being taken to central quarantine, according to workers who spoke to The Wall Street Journal. In late May, hundreds of workers demanded to be let back to their hometowns. The company, they said, relented and allowed some to leave, but workers say they still aren’t allowed to leave campus for a day off in Shanghai or to travel elsewhere.

“Once our plant opens to the outside world, I’ll leave and go somewhere else,” said a Quanta worker surnamed Hou. “I’ll never come back to Shanghai again.”

Quanta and Apple didn’t immediately respond to requests for comment. Quanta’s Shanghai plant assembles notebook PCs for Apple as well as products for other brands.

Most companies will take weeks to fully recover, said Erik Zheng, president of the American Chamber of Commerce in Shanghai. That’s because they must procure vendors and equipment to sanitize premises and air-conditioning systems, or set up their own Covid-19 testing facilities.

On Thursday, long queues for some Covid test centers hindered many from quickly getting back to work. Residents need a negative PCR test result within 72 hours to enter certain places including some office buildings.

Chris Torrens, a partner at consulting firm Control Risks, said the company will split its 90 staffers on two rosters. The teams will take turns to work from home and from the office, to help prevent the entire workforce being sent to quarantine if one employee tests positive for Covid.

One commercial building located in Shanghai’s Changning district requires tenants to declare that they have set up Covid monitoring and control measures, such as sterilization for incoming mail and parcels, and storing seven days’ worth of emergency food and necessities. The company will be held liable if Covid infections emerge as a result of noncompliance, a form with the instructions read.

“The biggest concern is if this restart is really sustainable,” said Bettina Schoen-Behanzin, vice president of the European Union Chamber of Commerce. “Because we cannot shut down the site, start up again and then shut down again.”

—Anniek Bao contributed to this article.

Write to Selina Cheng at [email protected], Sha Hua at [email protected] and Yang Jie at [email protected]