Shanghai aims to return to normal on June 1 as COVID lockdowns chill economy

SHANGHAI/BEIJING, May 16 (Reuters) – Shanghai on Monday outlined plans for a return to more normal life from June 1 and an end to a painful COVID-19 lockdown that has lasted more than six weeks and has contributed to a sharp slowdown in China’s economic activity.

In the clearest timeline yet, Deputy Mayor Zong Ming said Shanghai’s reopening would be done in stages, with movement restrictions largely remaining in place until May 21 to prevent a rebound in infections, before a gradual relaxation.

“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. .

Shanghai’s full lockdown and COVID restrictions on hundreds of millions of consumers and workers in dozens of other cities have hurt retail sales, industrial production and jobs, adding to fears that the economy does not contract in the second trimester.

The tough 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 fell 2.9% in April from a year earlier, down sharply from a 5.0% increase in March, while retail sales fell 11.1% year-on-year, after falling 3.5% the previous month. Read more

Both were well below expectations.

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

But the strength of the rebound is uncertain due to China’s uncompromising “zero COVID” policy of eradicating all epidemics at all costs.

“China’s economy could experience a more meaningful recovery in the second half of the year, barring a Shanghai-style lockdown in another major city,” said Tommy Wu, chief China economist at Oxford Economics.

“Risks to the outlook are on the downside, as the effectiveness of stimulus measures will largely depend on the extent of future COVID outbreaks and shutdowns.”

Beijing, which has discovered dozens of new cases almost every day since April 22, offers a strong indication of how difficult it is to fight the highly transmissible variant of Omicron.

The capital did not impose a citywide lockdown, but tightened restrictions to the point that road traffic levels in Beijing slipped last week to levels comparable to those in Shanghai, according to GPS data. followed by Chinese Internet giant Baidu.

On Sunday, Beijing extended work-from-home guidelines in four districts. He had already banned dine-in services in restaurants and reduced public transport, among other measures.

TRAIN AND PLANE

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

It is unclear how many businesses have reopened.

From Monday, the Chinese train operator will gradually increase the number of trains arriving and departing from the city, Zong said. Airlines will also increase domestic flights.

From May 22, public transport by bus and rail will also gradually resume operations, but people will have to present a negative COVID test dated less than 48 hours to use public transport.

During the lockdown, many Shanghai residents were repeatedly disappointed by changing the timings for lifting the restrictions.

Many residential complexes were notified last week 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,” an audience member posted on social media platform Weibo, adding a crying emoji.

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

In 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 new cases, down from 41.

Reporting by Brenda Goh in Shanghai; Kevin Yao, Yifan Wang and Muyu Xu in Beijing; and offices in Beijing and Shanghai; Written by Marius Zaharia; Editing by Robert Birsel

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