Not Even a Virus Can Stop This President From Dreaming
Portuguese language version of the book titled ‘Xi Jinping: The Governance of China Volume 2’ sits at the Media Center ahead of President Xi Jinping’s visit in Macau, China. (Photographer: Justin Chin/Bloomberg)

Not Even a Virus Can Stop This President From Dreaming


(Bloomberg Opinion) -- Headlines are often scarier than reality. By many accounts, the coronavirus outbreak seems unstoppable. At least two-thirds of China’s economy has shut down, with more than a dozen provinces extending their Lunar New Year break to next week. It could be even longer in the country’s eastern electronics-manufacturing hubs, which have the largest number of patients outside the epicenter of Wuhan. The world’s export powerhouse is grinding to a halt, investors fear.

But that’s not the full picture. Even as the government diverts resources to contain the outbreak, with millions of people on lockdown, some factories are still humming. President Xi Jinping hasn’t forgotten his Made in China 2025 dream. 

Consider display-panel makers. South Korea’s LG Display Co. said that while it has halted lower-tech LCD module lines at its Nanjing and Yantai plants until Feb. 9, its facility in Guangzhou, which makes more advanced OLED panels for smartphones, was operating normally. It will begin mass production in the first quarter.

This isn’t your ordinary factory. With a monthly capacity of 60,000 sheets, the Guangzhou site will account for almost half of LG Display’s OLED output. The manufacturer’s decision last year to open a brand-new facility was a big win for Beijing, as other companies started shifting their supply chains out of China amid the trade war. The local government will make sure LG manages to operate smoothly, virus or not. 

Even in the area surrounding Wuhan, some factories have remained open. Employees at NAND flash-memory supplier Yangtze Memory Technologies Co. must report to work as usual, though entries and exits are strictly monitored, according to industry reports. Credit Suisse Group AG said the company’s plant has been “operating throughout the past week” in a research note this week.

Then consider Changxin Memory Technologies Inc., another memory-chip maker near Wuhan. It hasn’t been affected by the sharp slowdown in domestic transportation of goods because it holds a national special license that allows it to continue making deliveries, according to TrendForce, a market-research company.

These chipmakers are the crown jewels of Xi’s Made in China 2025 blueprint. Yangtze Memory is managed by Tsinghua Unigroup Co., the business arm of prestigious Tsinghua University, the president’s alma mater. Its early-stage NAND memory technology shows potential, and is only half a generation behind the global flash memory leaders. It can plausibly narrow that gap in just a year or two. Will Beijing allow an untimely virus to set its grand ambition back again?

China’s gone through plenty of drama in the past two years. But if it can weather a trade war, surely it can ride out an epidemic, which many hope will subside by spring. While factories that make toys or clothing could be closed for months, you can bet those with national strategic importance will stay up and running. Fears of a major disruption in the global hardware supply chain are overblown. 

Once in full production.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.

©2020 Bloomberg L.P.

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