Chinese Cities Tighten Controls as Covid Cases Rise

Skift grip

China is sticking to its no-Covid policy despite the number of cases across the country, including the rise in economic powerhouse Shanghai. The risk of global economic repercussions increases with the duration of the restrictions.

Edward Russell

Shanghai reported a record number of symptomatic Covid-19 cases on Saturday and other parts of China tightened controls as the country maintained its “dynamic clearance” approach that aims to eradicate the highly transmissible variant of Omicron.

Zhengzhou Airport Economic Zone, a central manufacturing zone in China that includes Apple Inc supplier Foxconn, announced a 14-day lockdown on Friday “to be adjusted according to the epidemic situation.”

In northwest China, the city of Xian on Friday urged residents to avoid unnecessary travel outside their residential compounds and home-based businesses for employees to work or live at their workplaces, following dozens of Covid-19 infections this month.

A government official in Xian, responding to residents’ concerns about possible food shortages, said Saturday the announcement did not constitute a lockdown and the city would not impose one.

The city of Suzhou, near Shanghai, said on Saturday that all employees able to work from home should do so, and that residential compounds and corporate campuses should avoid unnecessary entry of people and vehicles. It reported more than 500 infections during its last outbreak.

Shanghai itself, which is at the center of China’s recent Covid surge from early March, on Saturday reported a record 3,590 symptomatic cases for April 15, along with 19,923 asymptomatic cases. The number of asymptomatic cases rose slightly from 19,872 cases a day earlier.

The city’s case tally accounts for the vast majority of cases nationwide, even as most of its 25 million people remain under control.

China’s “dynamic clearance” policy aims to quickly contain sporadic outbreaks as they occur. A comment from the Communist Party’s official People’s Daily newspaper on Saturday said the approach was the “best choice at this stage based on the current epidemic situation in China”.

But the ongoing restrictions prompted Japan’s consul general in Shanghai to ask the local government to address the concerns of Japanese businesses, in a letter posted on the consulate’s website on Saturday.

National support for a zero Covid policy has waned in recent weeks as virus-related restrictions have triggered food shortages, family separations, lost wages and economic hardship.

Supply chain disruptions

Analysts say widespread supply chain disruptions are likely to cause delays in shipments from companies such as Apple and weigh on the country’s economic growth rate this year.

China’s central bank on Friday night slashed the amount of cash banks must hold as reserves, in a bid to cushion a sharp slowdown in growth, though the cut was smaller than expected.

Goldman Sachs analysts have called for further policy easing.

“Policymakers could opt to use more fiscal measures (such as accelerating the construction of major infrastructure projects) and targeted monetary easing (such as loan renewals and rediscounting) as the primary political leverage in the future,” they said in a note.

In the Zhengzhou Economic Zone, only staff with valid passes, health codes and proof of negative Covid tests will be able to leave the zone during the two-week period, although “special vehicles” can travel normally for work reasons, local authorities said in a message on an official WeChat instant messaging account.

Foxconn, the trading name of Hon Hai Precision Industry Co Ltd, referred Reuters to its statement on Thursday that said its Zhengzhou plant was cooperating with the government’s epidemic control work and that plant operations were normal.

Overall, China reported 24,791 new coronavirus cases on April 15, of which 3,896 were symptomatic and 20,895 were asymptomatic, the National Health Commission said on Saturday.

(Additional reporting by Ben Blanchard in Taipei and Roxanne Liu in Beijing; Editing by Himani Sarkar, Raju Gopalakrishnan, Edmund Klamann and Clelia Oziel)

This article was written by Andrew Galbraith of Reuters and has been legally licensed through Industry Dive Content market. Please direct all licensing questions to [email protected].