More parts of China battle Covid and lockdown threats as cases rise

Covid-related restrictions have tightened in parts of China as local cases have risen, while lighter measures such as virus testing persist in Shanghai, pictured here July 3, 2022.

Qilai Shen | Bloomberg | Getty Images

BEIJING — Just days after China eased some Covid controls, cases of the virus in different parts of the country have put new regions on high alert.

The number of cities restricting local travel more than doubled in a week to 11 on Monday, from five the previous week, according to Ting Lu, chief China economist at Nomura.

The latest measures relate to regions that account for around 14.9% of China’s GDP, down from 10.1% a week earlier, Nomura said.

The daily number of Covid cases in mainland China, including those without symptoms, has risen from a handful of cases to around 200 or 300 new cases in the past few days. Most are asymptomatic.

Most of the new cases are in the Shanghai area. The neighboring city of Wuxi in Jiangsu province said on Saturday night that bars and gyms would have to close temporarily, while restaurants could only offer takeout.

Last week, a much smaller region called Si county in neighboring Anhui province ordered residents to stay at home and only leave at designated times for virus testing.

In June, Beijing and Shanghai attempted to resume normal business activity after weeks of restrictions that kept children out of school and many restaurants essentially closed. The southeastern metropolis of Shanghai was by far the hardest hit and shut down in April and May.

Last week, mainland China reduced the quarantine period for international travelers and close contacts of Covid cases. The country has also changed a national travel system that would theoretically make it easier to travel within the country.

The daily number of Covid cases in Beijing and Shanghai has fallen to single digits or zero in the past few days.

“Markets could get a little too complacent if they ignore the rebound in covid cases and underestimate the costs of persistent covid containment measures,” Lu de Nomura said in a report on Monday.

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In addition to new cases on the mainland in economic powerhouses like Jiangsu province, Lu noted the spread of Covid to neighboring economies – evident in the rising number of cases in Hong Kong and Taiwan’s daily average of more than 100. new deaths in the past week.

Mainland China hasn’t reported any new Covid deaths for weeks.

“We have been in the recovery phase of China’s ‘Covid Business Cycle (CBC)’ since the end of May, thanks to a drop in the number of Covid-19 cases, the lifting of lockdowns and other easing of the zero-Covid strategy (ZCS) restrictions and stimulus,” he said. “However, another wave of Omicron could cause a return to a downturn, even if the timing of such a event is uncertain.

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