HNHPF - Foxconn founder urged Chinese officials to hasten removing zero-COVID plans: report

The founder of Foxconn, also known as Hon Hai Precision ( OTCPK:HNHPF ), sent a letter to China's Communist Party to help quicken the removal of the country's befuddling zero-COVID policy or risk losing its place in the global supply chain, The Wall Street Journal reported .

The news outlet, citing people familiar with the matter, noted that Terry Gou had sent the letter more than a month ago as the company's plant in Zhengzhou dealt with a closed-loop system and was ravaged by the COVID restrictions, severely impacting its output of Apple's ( NASDAQ: AAPL ) iPhone.

The Taiwan-born Gou was Foxconn's chairman and CEO until 2019 when he stepped down.

The Journal added that Chinese health officials and government advisers "seized" on Gou's letter to make the case to lessen the country's stringent COVID-19 regulations. It noted that Chinese officials, including Premier Xi Jinping, had been considering steps to relax the rules, but that there was no timeframe and the officials were proceeding cautiously.

The news outlet added that any significant changes to China's zero-COVID policy would have required a sign-off from Xi.

In a statement to Reuters , Gou's personal office said it "sternly denies" the facts in The Journal story. The office told The Journal that were was "no such matter" but did not elaborate.

Foxconn, Apple ( AAPL ) and China's embassy in New York did not immediately respond to a request for comment from Seeking Alpha.

On Thursday, Foxconn said that the "closed-loop" system that had been in place at its plant in Zhengzhou, China, had been lifted. The announcement, made on the company's official WeChat, brought an end to the rigid system, which restricts workers to their dorms or the factory floor, after nearly two months.

Foxconn recently reported a sharp drop in its November revenue as a result of COVID-19 lockdowns around the country and worker unrest.

In early November, Apple ( AAPL ) warned that supply chain issues in China resulting from the country's strict COVID-19 policies would result in lower iPhone 14 Pro and Pro Max shipments than previously estimated .

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