Shanghai targets exit from COVID lockdown in June as Chinese economy slumps

By Brenda Goh and Kevin Yao

SHANGHAI/BEIJING (Reuters) – Shanghai on Monday outlined plans for ending a painful COVID-19 lockdown that has lasted more than six weeks, which has badly battered China’s economy, and for returning to a more normal from June 1st.

In the clearest timetable yet, Deputy Mayor Zong Ming said Shanghai would reopen in stages, with movement restrictions largely remaining in place until May 21 to prevent a rebound in infections, before easing.

“From June 1 to mid and late June, as long as the risks of infection rebound are under control, we will fully implement epidemic prevention and control, normalize management, and fully restore normal production and life in the city. “, she said.

But the announcement was met with skepticism by some Shanghai residents, who have repeatedly been disappointed by changes in the timetable for lifting restrictions.

“Shanghai, Shanghai…am I still supposed to believe you?” said a member of the public on the Weibo social media platform.

Shanghai’s full lockdown and COVID restrictions imposed on hundreds of millions of consumers and workers in dozens of Chinese cities have inflicted economic hardship across a range of sectors, adding to fears the economy could contract in the second trimester.

The restrictions, increasingly out of step with the rest of the world, which lifted COVID rules even as infections spread, are also sending shockwaves through global supply chains and international trade.

Monday’s data showed China’s industrial production and retail sales fell in April at the fastest pace in more than two years, missing expectations.

Recent data has been grim: restaurant revenues fell 22.7%, real estate sales in value fell 46.6% and auto sales fell 47.6%.

In Shanghai, China’s most populous city with 25 million people, no cars were sold last month, the data showed, and dealerships closed. China Eastern Airlines, which is based in the city, said passenger numbers plummeted 90.7% in April year on year.

Analysts said Chinese economic activity likely improved somewhat in May, and the government and central bank should roll out more stimulus to speed things up.

But the strength and durability of a rebound is uncertain given China’s intransigent “zero COVID” policy.

“The data paints a picture of an economy stalled and in need of more aggressive stimulus and rapid easing of COVID restrictions, none of which are expected to be released any time soon,” said Mitul Kotecha, analyst at TD Securities.

The data overshadowed Shanghai’s reopening plans, dragging Chinese stocks lower.

In Beijing, the discovery of dozens of new COVID cases every day for the past three weeks shows how difficult it is to eliminate even small outbreaks.

The capital did not impose a citywide shutdown, but tightened restrictions to the point that its road traffic levels last week were similar to those in lockdown Shanghai, according to data tracked by the Chinese giant. the Baidu Internet.

Catering services are banned, public transport curtailed and many residents have been asked to work from home.

A woman named Zhang, who runs a shop selling jianbing pancakes, a popular street food, outside one of Beijing’s closed subway stations, said her daily turnover had risen from 2,000-3,000 yuan ($737) to just 100-200 yuan ($29).

“Don’t we still have to pay the rent as usual? You see a lot of small businesses have closed,” she told Reuters on Monday from her empty, dimly lit store.

“PLEASE DON’T LIE”

In Shanghai, the deputy mayor said the city would begin reopening supermarkets, convenience stores and pharmacies from Monday, but movement restrictions were to remain in place until at least May 21.

From Monday, operators will gradually restore rail services and domestic flights, she said. From May 22, bus services will gradually resume but people will need to show a negative COVID test that is less than 48 hours old to take public transport.

Throughout Shanghai’s lockdown, authorities have repeatedly dashed hopes of ending the ordeal. Initially, the lockdown was only to last until April 5, when it was introduced on March 27.

Last week, many apartment complexes were advised that they would be in “silent mode” for three days, which usually means they could not leave the house and, in some cases, no deliveries. Another notice then indicated that the period of silence would be extended until May 20.

“Please don’t lie to us this time,” another Weibo user said, adding a crying emoji.

Shanghai reported less than 1,000 new cases for May 15, all inside areas under the strictest controls.

In the relatively freer areas, those monitored to assess progress in eradicating the outbreak, no new cases were found for a second consecutive day.

A third day would usually mean zero COVID status has been achieved and restrictions can begin to ease. Fifteen of the city’s 16 boroughs had reached “zero COVID”.

Beijing reported 54 cases the day before on Monday, down from 41 the day before.

($1 = 6.7858 Chinese yuan renminbi)

(Reporting by Brenda Goh in Shanghai; Kevin Yao, Yifan Wang and Muyu Xu in Beijing; and Beijing and Shanghai bureaus; Writing by Marius Zaharia and John Geddie; Editing by Robert Birsel and Mark Porter)

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