Shanghai ends COVID lockdown, returns to normal in June amid economic slowdown | China

Shanghai has made plans for more normalcy to return from June 1 and the end of a painful Covid-19 lockdown that has lasted more than six weeks and contributed to a sharp slowdown in Chinese economic activity.

In the clearest timeline yet, Vice Mayor Zhong Ming said Monday that Shanghai’s reopening will take place in phases, with movement restrictions largely in place until May 21 to prevent a rebound in infections, before gradually easing.

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

The full shutdown of Shanghai and Covid-19 restrictions on hundreds of millions of consumers and workers in dozens of other cities has hit retail sales, industrial production and employment, raising fears of an economic downturn in the second quarter.

The strict restrictions, increasingly at odds with the rest of the world, that have lifted Covid rules even as infections spread, are also sending shock waves through global supply chains and international trade.

Data on Monday showed that 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 contracted 11.1% year-on-year after declining 3.5% the previous month.

Both were well below expectations.

Analysts say economic activity probably improved somewhat in May, and the government and central bank are expected to implement more stimulus measures to speed things up.

But the strength of the recovery is uncertain due to China’s tough “zero COVID” policy to eliminate all outbreaks at any cost.

“The Chinese economy could see a more significant recovery in the second half, except for a Shanghai-like shutdown in another major city,” said Tommy Wu, senior China economist at Oxford Economics.

“Risks to the outlook tend to be bearish, as the effectiveness of stimulus policy will largely depend on the scale of the future Covid outbreak and lockdown.”

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

The capital has not imposed a citywide lockdown but has tightened restrictions so much that road traffic levels in Beijing last week fell to levels similar to those of Shanghai, according to GPS data tracked by Chinese internet giant Baidu.

On Sunday, Beijing expanded guidance to work from home in four regions. It has already banned dining services in restaurants and curtailed public transportation, among other measures.

In Shanghai, the vice mayor said the city will start reopening supermarkets, stores and pharmacies from Monday, but many restrictions on movement must remain in place until at least May 21.

It is not clear how many businesses have reopened.

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

From May 22, buses and railways will gradually resume operations, but people will have to show a negative Covid test for no more than 48 hours to use public transport.

During the lockdown, many Shanghai residents have been repeatedly disappointed by the shifting schedules for lifting restrictions.

Several apartment complexes received notices last week that they would be in “silent mode” for three days, which usually means not being able to leave the house and, in some cases, not being hooked up. Then another notice said that the period of silence would be extended until May 20.

“Please don’t lie to us this time,” an audience member said on social media platform Weibo, adding a crying emoji.

Shanghai reported less than 1,000 new cases on May 15, all within strictly controlled areas.

In the relatively freer areas – those monitored to measure progress in stemming the outbreak – no new cases were found for the second day in a row.

The third day usually means that a “zero Covid” status has been achieved and restrictions can begin to ease. Fifteen of the city’s 16 districts have reached zero Covid.

Beijing recorded 54 new cases, up from 41.