China isn't done with Covid

Hi, it’s Gao in Beijing. China is still on high alert for Covid-19 threats. But first...Today’s must-reads:• Apple is planning a new 15-inch [View in browser]( [Bloomberg]( Hi, it’s Gao in Beijing. China is still on high alert for Covid-19 threats. But first... Today’s must-reads: • Apple is planning a new 15-inch MacBook Air [for 2023]( and a new 12-inch laptop • Meta [halted the development]( of a smartwatch with two cameras • US authorities [accelerated an investigation]( into Tesla’s Autopilot feature Covid won’t end until China says so Residents in Shanghai celebrated the recent lift of a two-month Covid lockdown with spontaneous street parties and roadside karaoke. But for all the literal fireworks of that momentary relief, the end of China’s struggle with the virus is far from assured. The government’s commitment to an uncompromising Covid Zero policy means another lockdown of a major population center may be just around the corner if more infections are detected. Shanghai itself is doing a [mini-lockdown]( on Saturday to conduct a mass testing drive. What another major lockdown may mean for the already frayed and disjointed global supply chain would be anyone’s guess. We know for sure that the world at large doesn’t want to see its manufacturing linchpin trapping itself in a never-ending maze of Covid precautions—halting assembly lines, freezing logistics and inevitably hampering everything from Apple Inc. MacBooks to unbranded plastic cups from reaching consumers. Many people outside of China speak of Covid-19 in the past tense. As a Beijing dweller of 12 years, I can tell you that here it’s still very much the present. Fears of the virus and the restrictive measures it triggers are real. Last month, residents [rushed]( to stockpile food after rumors that the capital city was heading for its own Shanghai-style lockdown. Restaurant waiters, software engineers and staff from state-owned conglomerates were among those asked to stay home for weeks after local authorities sealed subway stations in Beijing’s business districts. “Closed-loop” operation is a widely used method for keeping factories running in what’s effectively a quarantine bubble during lockdowns. The biggest manufacturers, including Apple contract partner Foxconn Technology Group, Tesla Inc. with its Gigafactory, and at least two Chinese chipmakers have put thousands of staff in isolation bubbles around Shanghai. [Semiconductor Manufacturing International Corp.](bbg://securities/981%20HK%20Equity), the No.1 chipmaker in China, said the closed loop enabled its factories to operate at almost full capacity. Yet the mechanism [didn’t fit]( all factories. Omicron made its way into the crowded Shanghai dormitories of MacBook assembler Quanta Computer Inc. in April—before the company had closed off its loop and isolated workers. Soon enough, buses were lined up to ferry Covid-positive workers to hospitals and some [clashed]( with the guards because of confusion about prolonged lockdown policies. Even in Covid-free bubbles, the human cost is colossal. Staff have slept on floors due to a shortage of accommodation and parents have been separated from their children for weeks. Employers are also under pressure to pay bonuses to office employees who opted to stay at work 24/7 and didn’t go home to avoid infection. Meanwhile, the logistics challenges the country faces are even more complex. Unexpected blocks of road transportation and gluts of inventory waiting to be distributed at ports have caused a [cascade of delays](bbg://news/stories/RBNQD1DWLU6A). Essential components aren’t reaching factory floors and production schedules are being upended. If there’s any silver lining, it’s that at least this isn’t peak season for the manufacturers of consumer electronics like smartphones. Factories can be expected to catch up on lost time in the latter half of the year. But any hope of a true return to normalcy assumes that the lockdowns won’t return. And if the first two years of the pandemic have taught us anything, it's that they almost certainly will.—[Yuan Gao](mailto:ygao199@bloomberg.net) The big story Oracle billionaire Larry Ellison is making his Hawaiian island more [hospitable to the super-rich]( and pushing out families that have been there for generations. What else you need to know Chinese officials have started early discussions about reviving Ant Group’s initial public offering, a sign that the country’s [tech crackdown may be easing](. The SEC is investigating whether the marketing of the [TerraUSD stablecoin]( violated federal investor-protection regulations. 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