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China’s Covid Outbreak Wanes As Curbs Eased To Boost Economy

China has reported the fewest new Covid-19 cases in almost three months, prompting authorities to ease lockdowns.

China’s Covid Outbreak Wanes as Curbs Eased to Boost Economy
China’s Covid Outbreak Wanes as Curbs Eased to Boost Economy

China reported the fewest new Covid-19 cases in almost three months, with the easing of outbreaks in Beijing and Shanghai emboldening authorities to relax some of the strictest virus controls of the pandemic and move to stimulate the country’s faltering economy.

In Beijing, infections dropped to 12 on Sunday, from 21 on Saturday. Curbs on movement in several districts started to be loosened Sunday after officials said the outbreak was under control. The decline has eased concern that Beijing could have been headed for a lockdown when it was reporting several dozen cases a day earlier in the outbreak despite increasingly strict restrictions. 

Shanghai will lift lockdown measures for residents in low-risk areas, allowing them to leave and enter their compounds freely starting from Wednesday, according to a statement from the municipal government. The city will resume taxi and ride hailing services while allowing cars on the road in low-risk areas. Cases in the financial hub fell to 67 for Sunday from 122 on Saturday with bus and subway services to reopen in an orderly manner from June 1.

Beijing Eases Curbs, Shopping Malls Reopen: Lockdown Tracker

There were 122 cases reported across the country on Sunday, the fewest since March 3. China hasn’t reported a day without infections since October despite its zero-tolerance approach to the virus.

A sign and barrier tape placed to prevent large groups from gathering at an outdoor park in Beijing, on May 28.Photographer: Kevin Frayer/Getty Images
A sign and barrier tape placed to prevent large groups from gathering at an outdoor park in Beijing, on May 28.Photographer: Kevin Frayer/Getty Images

Consumption-related plays led gains in Chinese equities as traders snapped up shares of companies that are positioned to benefit from a gradual resumption of normal life. Still, the benchmark CSI 300 Index rose just 0.7%, trailing a 1.7% jump in the broader MSCI Asia Pacific Index.

While sweeping curbs have brought Covid’s spread under control for now in China’s two most important cities, the virus has evolved to become far more contagious, said Ben Cowling, chair of epidemiology at The University of Hong Kong’s School of Public Health. That means it’s likely to flare up again and again, making it more difficult to control than it was last year when a less transmissible strain was spreading, he said.

“Beijing and other cities in China would need to be prepared to implement outbreak control measures more often in the coming year than in 2021 because of the increased transmissibility of the virus over time,” Cowling said.

On Monday afternoon, officials told reporters in Beijing that there was an omicron infection in the community after three days without any such cases, underscoring the need to stay vigilant against a potential resurgence.

Meanwhile, Beijing’s western district Haidian, home to the country’s top universities and offices for global tech firms like Tencent Holdings Ltd and Microsoft Corp, put several neighborhoods into a seven-day lockdown as persistent infections there pose the risk of additional community spread.

Economic Action

At the weekend, Shanghai said it will accelerate approvals for property projects and increase the quota for car ownership by 40,000 this year. A purchase tax for some passenger vehicles will be reduced and subsidies will be given to electric-car buyers. Covid test requirements will be loosened for people entering public places from June 1 as the city tries to restore a sense of normalcy after a two-month lockdown of its 25 million population. 

Read more: Shanghai Unveils Economic Support Measures as Lockdowns Ease

China’s dogged adherence to its Covid Zero policy at all costs -- epitomized by Shanghai’s lockdown and restrictions imposed elsewhere in the country of 1.4 billion -- has dragged on everything from consumer spending to manufacturing in the world’s second-largest economy. The harsh curbs, which confined millions of people to their apartments or residential compounds, also sparked clashes between residents and police. 

The Shanghai measures come after the State Council, the equivalent of China’s cabinet, outlined a 140 billion-yuan ($21 billion) package of extra tax rebates and loans aimed at stimulating the battered economy. Most economists expect it will be difficult for China to meet its economic growth target of about 5.5% this year because of the disruption wrought by its Covid approach.  

In Beijing, most public transport including buses, subways and taxis will resume in three districts including the biggest, Chaoyang. Shopping centers outside of controlled areas will also be allowed to reopen with capacity limits. Chaoyang is one of Beijing’s key central business districts, hosting most foreign embassies and many in the expatriate community. 

WATCH: Shanghai is bringing measures to support an economy that has been battered by Covid lockdowns. Emma O’Brien reports.Source: Bloomberg
WATCH: Shanghai is bringing measures to support an economy that has been battered by Covid lockdowns. Emma O’Brien reports.Source: Bloomberg

Some Beijing residents who were required to work from home previously will be allowed to return to their offices, while hotels and hostels in five districts on the city’s outskirts will be permitted to reopen. 

Schools and kindergartens will remain suspended and university campuses will stay closed, with students urged to go home before the summer holidays. Dining-in is still banned at restaurants.

(Updates with easing of some Shanghai restrictions in third paragraph.)

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