Beijing lifted Covid-19 restrictions starting on June 5 based on improvements in the epidemic situation, bringing the lives of people back closer to normalcy. Except in Fengtai district and some places in Changping district, where the strict measures would continue, all city restaurants could resume dine-in services. People can also go back to work after several weeks of working from home. All public transportation resumed normal operations. Beijing reported five new locally transmitted cases as of 3 pm on June 5 – all among people already in quarantine – bringing the total number of infections to 1,822 since April 22. Shanghai reported two locally transmitted cases and one asymptomatic infection.
Shanghai ended its two-month lockdown on June 1 as more than 22 million residents, or 90% of Shanghai’s population of 25 million people, living in low-risk areas that had been declared infection-free for the past 14 days were allowed to leave their compounds, access public transport, and go to offices and shopping malls. People are required to show a negative PCR test taken within 72 hours before using public transport and visiting public venues. Twelve Shanghai shopping centers owned by such Hong Kong developers as Sun Hung Kai Properties (SHKP), Swire Properties, Kerry Properties and Hang Lung Properties said business resumed at more than 800 stores. Shopping center managers must limit the number of customers entering their premises, with the daily traffic capped at 75% of their capacity. But three days after the lockdown formally ended, seven new Covid-19 cases were discovered in the community, sending four residential compounds back into a 14-day lockdown.
“The recent Covid-related restrictions in Shanghai and elsewhere have caused a significantly more severe economic hit than most prior lockdowns in China,” Louis Kuijs, Chief Economist for the Asia-Pacific at S&P Global Ratings, said in a note last month. “The effect on manufacturing output and supply chains has been large.” In April, output from Shanghai’s industrial sector was valued at CNY128.617 billion, a decline of 61.5% compared with the same month last year. Suzhou also recorded a 0.5% year-on-year decline in industrial output in the first four months of this year, a fall of 10.1 percentage points from the first quarter.
At the end of May, the throughput of containers of the Port of Shanghai had resumed to 95.3% of pre-outbreak levels. Throughput capacity of the port has increased 1.9% in the first four months this year, compared with the same period last year. The Shanghai Stock Exchange planned to allow all technicians, compliance officers and back-office clerks to leave the closed loop and let them commute from home every day from June 6. Exchange staff had been locked in the building since late March to ensure stock trading continued. Shanghai’s reopening also means that the city’s financial industry, with about 1,700 licensed institutions and nearly 500,000 employees, is gradually returning to normal.
The Beijing government encouraged all residents to spend the Dragon Boat Festival (June 3-5) in the city, not to travel to other provinces and to stay away from places of high or medium risk for Covid-19. Fengtai district, which has reported new cases recently, asked residents to stay in the district and not go out unless absolutely necessary.
The British Chamber of Commerce in China has called for “predictable and proportionate” Covid measures under the zero-Covid policy to mitigate disruption to mobility and manufacturing activities. Foreign business sentiment in China has reached “a tipping point” with uncertainty denting confidence and eroding attraction for overseas talent and investment, the Chamber said in its latest position paper. “Recent sporadic outbreaks of Covid-19 across the country and the corresponding snap lockdowns have taken away one of things most businesses have been able to depend on: a stable and relatively predictable business environment. A growing sense of detachment and isolation among the foreign business community in China is now tangible,” the paper added. Uncertainties are “reaching a crescendo”, which are weighing on operations and forcing foreign talent to leave China, with “considerable barriers” to bringing in replacements. The lack of clarity and communication in regard to various policies, goals and processes is perhaps the most significant cause for concern.” “A sizeable outflow” of international talent and a “brain drain” across all industries has taken place, the paper said. The Chamber also highlighted long term optimism due to China’s market potential, including financial services, retail and consumer goods, and decarbonization.
Many cities have begun issuing coupons worth millions of yuan to boost consumption. Suzhou in Jiangsu province will issue coupons worth CNY100 million. More than 4,000 companies in Guangzhou organized around 10,000 promotional events in May to promote the city’s commerce. “Residents can now receive several thousand yuan in government subsidies if they buy a car,” Lin Guoqiang, Deputy Director of the Guangzhou Commerce Bureau said. This overview is based on reports by the China Daily, Shanghai Daily, Global Times and South China Morning Post.
