China & covid.......16 May 2022 17:01
Shanghai has set out plans for the return of more normal life from 1 June and the end of a painful Covid-19 lockdown that has lasted more than six weeks and contributed to a sharp slowdown in China’s economic activity.
In the clearest timetable yet, deputy mayor Zong Ming said on Monday that Shanghai’s reopening would be carried out in stages, with movement curbs largely to remain in place until 21 May to prevent a rebound in infections, before a gradual easing.
“From June 1 to mid- and late June, as long as risks of a rebound in infections are controlled, we will fully implement epidemic prevention and control, normalise management and fully restore normal production and life in the city,” she said.
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The full lockdown of Shanghai and Covid curbs on hundreds of millions of consumers and workers in dozens of other cities have hurt retail sales, industrial production and employment, adding to fears the economy could shrink in the second quarter.
The severe restrictions, increasingly out of step with the rest of the world, which has been lifting Covid rules even as infections spread, are also sending shockwaves through global supply chains and international trade.
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Data on Monday showed China’s industrial output fell 2.9% in April from a year earlier, down sharply from a 5.0% increase in March, while retail sales shrank 11.1% year-on-year after falling 3.5% the month before.
Both were well below expectations.
Economic activity has probably been improving somewhat in May, analysts say, and the government and central bank are expected to deploy more stimulus measures to speed things up.
But the strength of the rebound is uncertain due to China’s uncompromising “zero Covid” policy of eradicating all outbreaks at all costs.
“China’s economy could see a more meaningful recovery in the second half, barring a Shanghai-like lockdown in another major city,” said Tommy Wu, the lead China economist at Oxford Economics.
“The risks to the outlook are tilted to the downside, as the effectiveness of policy stimulus will largely depend on the scale of future Covid outbreaks and lockdowns.”
Beijing, which has been finding dozens of new cases almost every day since 22 April, offers a strong indication of how difficult it is to tackle the highly transmissible Omicron variant.
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The capital has not enforced a city-wide lockdown but has been tightening curbs to the point that road traffic levels in Beijing slid last week to levels comparable to Shanghai’s, according to GPS data tracked by Chinese internet giant Baidu.
On Sunday, Beijing extended guidance to work from home in four districts. It had
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