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U.S. Factories in China Are Open, But With ‘Severe’ Worker Shortage

Bloomberg logoBloomberg 2/17/2020 Bloomberg News
FILE - In this Feb. 4, 2020, file photo people pass by a screen warning about a new coronavirus in a subway station in Seoul, South Korea. Factories across China are still closed to try to limit spread of the coronavirus, leaving U.S. business owners in limbo. © ASSOCIATED PRESS FILE - In this Feb. 4, 2020, file photo people pass by a screen warning about a new coronavirus in a subway station in Seoul, South Korea. Factories across China are still closed to try to limit spread of the coronavirus, leaving U.S. business owners in limbo.

(Bloomberg) -- Most U.S. factories in China’s manufacturing hub around Shanghai will be back at work this week, but the “severe” shortage of workers due to the coronavirus will hit production and global supply chains, according to the American Chamber of Commerce in Shanghai.

While about 90% of the 109 U.S. manufacturers in the Yangtze River delta expect to resume production this week, 78% of them said they don’t have sufficient staff to run at full speed, according to a survey by AmCham. The biggest reasons for that were travel restrictions on their staff returning from holidays and the requirement to quarantine them for two weeks once they do come back.

“Most factories have a severe shortage of workers, even after they are allowed to open,” Chamber President Ker Gibbs said in an email. “This is going to have a severe impact on global supply chains that is only beginning to show up.”

Almost 60% of the firms expect demand to be lower than normal over the next few months, nearly half said their global supply chain had already been affected by the business shutdown, and about a third of them will consider moving operations out of the country if this continues, according to the survey.

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at yzhao300@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger, Karthikeyan Sundaram

For more articles like this, please visit us at bloomberg.com

©2020 Bloomberg L.P.

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