August 30, 2022

China places millions into Covid lockdown again as economy continues to struggle

China places millions into Covid lockdown again as economy continues to struggle

Key cities of Shenzhen, Guangzhou and Dalian are under curbs again, amid protests and data showing factory slowdown

A woman being tested for Covid in Chongqing. New cases in Shenzhen and Dalian have prompted lockdown for millions.

China has placed millions of its citizens under renewed lockdown after fresh outbreaks of Covid-19 as the government persists in its hardline policy on containing the virus in the face of more evidence that it is suffocating the economy.

The measures affected cities from the southern cities of Shenzhen and Guangzhou to the northern port city of Dalian, and from the western metropolis of Chengdu to Shijiazhuang in central Hebei province.

The lockdown in Dalian was expected to affect about half of its six million residents and was due to last five days, although authorities have in the past extended restrictions depending on the number of new cases.

In Shenzhen, at least four districts with around 9 million residents in total, have already ordered closure of entertainment and cultural businesses and halted or reduced restaurant dining for a few days.

Guangzhou, a city of nearly 19 million people near Hong Kong, reported just five locally transmitted infections for Tuesday but authorities ordered certain areas in one district to close indoor entertainment venues and dining at restaurants until Saturday.

The city also ordered all kindergartens and primary, middle and high schools in the district to delay resuming the new term and halt offline sessions that have already started, according to state media reports on Wednesday. Bus and subway services in the district were also reduced.

The closures came as data released on Wednesday showed more signs that China’s economy is being held back by the strict zero-Covid strategy.

The closely watched purchasing managers’ index, a key gauge of manufacturing activity in the world’s second-biggest economy, came in at 49.4 in August, up from July’s 49.0 but still below the 50-point mark separating growth from contraction, the national bureau of statistics said.

Sporadic Covid-19 lockdowns around China have dampened consumer enthusiasm and business confidence, while searing temperatures across large parts of the country this summer prompted power rationing for factories.

According to Capital Economics, 41 cities, responsible for 32% of China’s GDP, are currently in the midst of outbreaks – the highest number since April.

“For now, the resulting disruption appears modest, but the threat of damaging lockdowns is growing,” said Julian Evans-Pritchard, senior China economist at Capital Economics. “And even if they are avoided, we expect growth to remain subdued going forward.”

Beijing has been relatively unaffected although travel in and out of the capital has been discouraged and residents are subject to testing on an almost daily basis.

Partial lockdowns have been imposed on other cities such as Chengdu in the south-west, Shenyang in the north-east and Jishui in the south-east.

China’s “zero-Covid” policy contrasts with other countries’ gradual easing of restrictions combined with vaccinations, medication and voluntary isolation.

China has largely kept its borders closed to foreign visitors, requiring any to submit to more than a week of quarantine in hotels where sanitary conditions are often poor. Masking and regular testing are standard and close contacts can be forcibly transported to field hospitals.

The World Health Organization has called China’s policy unsustainable. On Monday a Chinese thinktank made a rare public display of dissent, saying the curbs – which have shut down cities and disrupted trade, travel and industry – must change to prevent an “economic stall”. The Anbound Research Center said President Xi Jinping’s government needed to focus on restoring growth like the United States, Europe and Japan.

“Preventing the risk of economic stall should be the priority task,” the thinktank said in a report titled It’s Time for China to Adjust Its Virus Control and Prevention Policies.

Previous lockdowns have seen tens of millions confined to their homes, sometimes for weeks. A strict lockdown this week in the largest city and commercial hub, Shanghai, led to protests over lack of food and medical services.

China on Tuesday reported 1,717 cases of local transmission, 52 of them in Liaoning province where Dalian is located. Most of the cases were reported in Sichuan province, whose capital is Chengdu, and the majority were asymptomatic.

With Associated Press, Reuters and Agence-France Presse.

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