China Sees Lockdowns Surge in Week Since Covid Policy Adjusted

(Bloomberg) -- Covid control restrictions now weigh on a fifth of China’s economy as infections continue their upward march, defying the central government’s call for more targeted, less disruptive Covid Zero measures. 

There were 27,307 new cases recorded for Monday, just shy of the previous record 28,973 reached in April when Shanghai’s outbreak sparked a surge in infections. The southern manufacturing hub of Guangzhou remains the epicenter of the current wave, reporting the bulk of the 8,588 infections in the broader Guangdong province. The metropolis of Chongqing detected 6,297.

China’s Covid Easing in Question as Tough Curbs, Deaths Return

The continued climb in cases has spooked local authorities into reintroducing measures like expanded testing and shuttering offices and schools in big cities, despite the new directives over a week ago that marked an easing in the official Covid Zero playbook. 

While city-wide lockdowns like in Shanghai earlier this year have not been ordered this time, a growing web of restrictions means that a total of 48 Chinese cities are subject to some form of district-level or widespread movement restrictions, according to data compiled by Nomura Holdings Inc. analysts. 

This is affecting nearly one fifth of China’s total economic output, up from 15.6% from Monday last week, the analysts led by chief China economist Lu Ting said. Goldman Sachs’ Effective Lockdown Index also climbed in recent weeks. 

The worsening national outbreak saw Vice Premier Sun Chunlan, known as the nation’s Covid czar, visiting Chongqing on Monday in her first documented appearance at a virus hotspot since August. There, she urged “decisive” measures to curb the outbreak and minimize the pandemic’s impact on the economy and daily life, Xinhua reported. 

It’s the first time Sun has emerged to lead an on-the-ground outbreak response since the new Covid playbook was issued, reflecting the growing severity of the situation. 

The outbreaks in some of China’s biggest cities come as officials struggle with how to control the contagion without the usual tools of snap lockdowns and mass testing. While the changes are aimed at balancing virus control with limiting disruption to daily life, early signs of the more relaxed policies being implemented have sparked confusion about whether officials now have a greater tolerance for flareups.

The dilemma is most clearly on display in the city of Shijiazhuang, not far from Beijing. Its approach after the Covid pivot was closely watched as potentially leading the transition away from Covid Zero. Daily infections plunged after the city dropped several bedrock policies, including mass testing, and allowed students to go to school despite an ongoing outbreak. 

However, after a spike in cases over the weekend, officials asked residents to stay at home Monday -- effectively reverting to a de-facto lockdown and highlighting the difficulties China faces in trying to carry out any meaningful shift away from the Covid Zero regime. 

Read more: China’s Covid Easing in Question as Tough Curbs, Deaths Return

In Beijing, which reported the nation’s first Covid deaths in almost six months over the weekend, Communist Party chief Yin Li urged local officials to stick to Covid Zero and curb the surge in infections. The capital reported 1,426 cases for Monday. 

Schools across Beijing’s downtown have mostly switched to online learning. All people arriving in the city from Tuesday will be required to take three PCR tests within the first three days and stay at home until they get negative results. 

Officials have maintained that the new 20-point Covid playbook is a refinement of their approach, and doesn’t signal a more substantial shift to living with the virus. That’s been echoed by state media. The People’s Daily, the Communist Party’s flagship newspaper, has published a series of commentaries reaffirming that the changes in some polices don’t indicate China is “lying flat.”

Still, health authorities have outlined plans to boost hospital capacity in a signal they’re preparing for rising case numbers. China will build more hospitals to treat Covid patients and ensure that intensive care units account for 10% of all hospital beds. They’re also drafting plans to accelerate vaccination, a key pillar of any shift in reopening efforts. 

--With assistance from and .

(Updated with Nomura and Goldman Sachs lockdown index.)

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