Pegatron, a significant iPhone manufacturer, has suspended operations at two subsidiaries in the Chinese cities of Shanghai and Kunshan as global supply chains feel the strain of Beijing's strict zero-Covid policy.

Shanghai's commercial district has become the epicenter of China's largest Covid-19 outbreak since the virus first emerged more than two years ago.

Since the beginning of the month, the city of 25 million has been virtually completely shut down.

"We have suspended operations temporarily," Pegatron stated in a Tuesday's report to the Taiwan Stock Exchange.

The Taiwanese company stated that it is "actively cooperating with local authorities" and is working to reopen as soon as feasible.

Suspensions have been imposed on two of its companies in Shanghai and the neighboring Kunshan city.

Supply networks in and around Shanghai, home to the world's busiest container port and a primary gateway for international trade, have been pressured by stay-at-home orders and stringent testing requirements.

On Wednesday, China recorded roughly 28,000 local virus infections, which occurred in Shanghai.

Numerous factories have been forced to shut down operations due to increased virus infections, and some employees have taken up residence at their offices as enterprises struggle to stay afloat.

Pegatron's suspensions are the latest setback for Apple, which has also experienced setbacks on other suppliers' assembly lines in recent months as Chinese towns try to contain virus outbreaks.

In March, Foxconn, another critical supplier, ceased operations in Shenzhen, China's technology capital.

Foxconn claimed in late March that it had "resumed fundamental operations" in Shenzhen.

Chinese officials have struggled to maintain a steady flow of products around the country because of a problematic virus that restricts travel.

A late Tuesday circular from the Transport Ministry prohibited "blocking of road transportation" vehicles and workers and mandated more efficient Covid-19 screening along transportation routes.

Officials in virus-hit areas such as the northeastern province of Jilin have also provided travel passes to allow agricultural workers to return to farmland via chartered buses.

"Since mid-March, the Chinese economy has been facing an increasing risk of recession," Nomura analysts said this week, noting substantial disruptions in the delivery of exports, with coastal areas particularly severely hit by virus containment measures.