China rushes to control new Covid cases across the country

Workers in Shanghai’s Changning district put up fences on October 7, 2022 around a cordon in the neighborhood following reports of new Covid cases.

Hector Retamal | Afp | Getty Images

BEIJING – New Covid cases are rising across mainland China, prompting many local authorities to tighten controls on movement.

About 4.8% of China’s gross domestic product was negatively affected by Covid controls as of Monday, according to a Nomura model. This is up from 4.3% a week ago.

Three of Shanghai’s downtown districts ordered entertainment venues such as Internet cafes to close temporarily on Monday, according to official announcements.

On Tuesday, many schools in the central Chinese city of Xi’an canceled in-person classes for most students, according to a local news report. A hashtag about the sudden closures was one of the most popular items on Weibo, China’s Twitter-like social media platform.

Xi’an’s education department did not immediately respond to a CNBC request for comment.

The measures follow a week-long National Day that ended Friday, during which “China’s overall Covid situation appears to have significantly worsened,” Nomura’s China chief economist Ting Lu and a team said in a note on Monday.

It's 'pure speculation' that China's zero-Covid policy will be eased after party congress: Moody's

The report pointed to the shutdown since October 4 of a popular tourist town in southern Yunnan province, Xinjiang’s ban on people leaving the region due to a local Covid outbreak, and a shutdown in the city of Haikou in Hainan province on the 6th. October.

The seven-day moving average of locally transmitted Covid infections with symptoms more than doubled from 136 on Oct. 1 to 305 on Oct. 9, Nomura analysts said.

Mainland China reported 427 new symptomatic Covid cases on Monday in more than 20 of the country’s provincial-level regions. When infections without symptoms were added, the daily number of cases exceeded 2,000 and came from almost all of the 31 provincial-level regions.

Domestic tourism revenue during the holiday this month – China’s last holiday of the year – reached 287.21 billion yuan ($40.45 billion), according to China’s Ministry of Culture and Tourism. That was down from last year and remained well below 2019 levels, the ministry said.

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However, online booking platform Trip.com said almost two-thirds of holiday bookings were for nearby trips or stays, with spending up 30% year-on-year.

Strict requirements for virus testing and the risk of not being able to return home have discouraged long-distance domestic travel on the mainland.

That contrasts with a surge in overseas travel as Hong Kong, Taiwan, Japan and South Korea have joined other countries in easing rules on quarantine and virus testing.

Adhering to zero Covid

This October is a particularly politically sensitive time for China as president Xi Jinping expected to consolidate its power at a key meeting of the ruling Chinese Communist Party next week.

Ahead of this congress, the central government authorities reaffirmed their dynamic zero-Covid policy in an article on Monday in the party’s newspaper, the People’s Daily.

State broadcaster CCTV summarized the article on its nightly news program by stressing the need for an even more targeted approach to controlling Covid.

“We must remain vigilant against the spread of the pandemic, overcome paralyzed thinking, war weariness, a mentality of taking chances and an attitude of taking it easy – and conscientiously carry out the work of pandemic prevention and control,” the broadcaster said according to the TV station. for a CNBC translation of the Chinese.

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