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HomeMarketLetter from largest Apple supplier Foxconn’s founder prodded China to ease zero-Covid...

Letter from largest Apple supplier Foxconn’s founder prodded China to ease zero-Covid rules

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A letter from the founder of the world’s largest iPhone assembler played a major role in persuading China’s Communist Party leadership to accelerate plans to dismantle the country’s zero-tolerance Covid-19 policies, according to people familiar with the matter.

In the letter to Chinese leaders, Foxconn Technology Group
2354,
-0.19%
founder Terry Gou warned that strict Covid controls would threaten China’s central position in global supply chains and demanded more transparency into restrictions on the company’s workers, the people said. Mr. Gou sent the letter a little more than a month ago as Foxconn’s factory in the city of Zhengzhou was rocked by turmoil over Covid restrictions.

Chinese health officials and government advisers seized on Mr. Gou’s letter to bolster the case that the government needed to speed up its efforts to ease its tough Covid-19 controls, people familiar with the matter said. The eruption weeks later of nationwide protests gave policy advisers further ammunition to press the case for relaxing measures, two of the people said.

Officials and advisers pushing for softer measures argued the zero-tolerance approach had been successful in protecting public health but the Omicron variant required a shift in tactics, the people said. Omicron is less deadly, those officials and advisers argued, but its highly contagious nature would lead to more lockdowns, at a time the public was growing weary of them, and disruptions to businesses, threatening the country’s status as the world’s factory floor.

“There’s no such matter,” a statement from Mr. Gou’s personal office said, without elaborating. Foxconn, where Mr. Gou served as chairman until 2019 after founding the company, and Apple Inc.
AAPL,
+0.99%
didn’t immediately respond to requests for comment. China’s State Council Information Office didn’t respond to a request for comment.

An expanded version of this story appears on WSJ.com.

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Credit: marketwatch.com

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