SHANGHAI/BEJING, May 18 (Reuters) – Health authorities in Shanghai have faced “tremendous” pressure to keep China’s most populous city free of COVID-19 as residents approach the days until June 1 and the end of their lockdown after almost two Months counting down of isolation.

The commercial hub of 25 million reached the fourth straight day with no new community infections, holding on to its prized ‘zero-COVID’ status and holding out hope that the lockdown misery would end soon.

While there are no new cases, authorities are not lifting the lockdown immediately, but are gradually easing restrictions through June 1, with some shops allowed to open this week and public transport expected to partially resume over the weekend.

Residents of condominiums across Shanghai have been issued passes that allow one person from each household to go out for a few hours at a time. Some can only go out twice a week and only blocks from their homes.

To get into a supermarket, they also need a pass from the store.

“The risk of finding positive infections among risk groups remains and the pressure to … prevent a backlash remains intense,” Zhao Dandan of the city health commission told reporters on Wednesday.

The Xuhui District government in Shanghai posted images on its social media account of workers planting flowers alongside largely deserted streets to ensure a “clean and beautiful” environment for “the resumption of work and production in the city.”

But in the central Changning district, large piles of rubbish spilled onto the streets, a sign of how much the city has struggled to keep services running during the lockdown.

As part of the phased reopening, Shanghai authorities have issued a list of 864 financial institutions that can resume operations, three sources with knowledge of the matter said. Continue reading

Social media posts have shown long lines of people, most of them migrant workers, outside one of the city’s main train stations hoping to return to their hometowns after being given permission to go outside.

Some have been photographed lugging suitcases on rented bicycles or taking long walks from far corners of town.

The United States, Europe and other regions have lifted restrictions to “live with the virus” and keep their economies going even as infections spread.

But China has chosen a radically different path, ruthlessly restricting movement and isolating people to end any outbreak, regardless of the economic cost.

Victory over the highly transmissible Omicron variant has proven to be an uphill battle, as demonstrated by last month’s battle in the capital Beijing.

Beijing authorities have been discovering dozens of new cases almost every day since April 22.

While most Beijingers work from home, they can at least roam outside, albeit with few points of contact, as many shops, gyms, and other businesses have closed in several districts.

“I’m glad we’re not confined at home like in Shanghai, but still quite frustrated with what’s happening as most countries have already moved on from COVID,” said Lin Cong, 27, who lives in Chaoyang District, the epicenter, lives of the outbreak.

LOSS OF INCOME AND TRUST

Overall, Shanghai reported fewer than 1,000 new cases for May 17, none from outside a quarantine area. Beijing reported 69 cases, down from 52.

China’s no-holds-barred strategy to fight COVID has imposed some sort of restrictions on hundreds of millions of people in dozens of cities, disrupting a global surge in production from cellphones to electric vehicles.

Companies from Apple (AAPL.O) to Tesla (TSLA.O) have taken a hit.

E-commerce group JD.com (9618.HK) on Tuesday said it was cautious about its outlook as consumers lose income and confidence and logistics have been disrupted. Continue reading

Still, investor sentiment towards JD.com and its peers has improved following comments by Vice Premier Liu He at a meeting with tech leaders on Tuesday, raising hopes that regulatory crackdowns on the sector are easing.

The unprecedented crackdown that began in 2020 has hit tech companies and roiled markets, shaving billions of dollars from market value and severely hurting a key growth driver. Continue reading

However, a more permissive tech sector would not offset the headwinds China is facing from COVID, a real estate downturn, geopolitics and rising borrowing costs in the United States and elsewhere.

New home prices fell in April for the first time since December, data showed on Wednesday.

Chinese equities (.CSI300), (.SSEC) fell and the yuan weakened as bonds faced continued capital outflows.

This week, data showed that consumption and factory production fell in April at a pace not seen since early 2020, when COVID, which was first detected in the city of Wuhan in late 2019, began its global spread.

China will likely struggle to stage a quick recovery without compromising on its “zero-COVID” policy, analysts say. Continue reading

Reporting by David Stanway, Brenda Goh, Winni Zhou, Casey Hall in Shanghai; Martin Quin Pollard, Yifan Wang and Eduardo Baptista in Beijing; and the Beijing and Shanghai offices; Letter from Marius Zaharia

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