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

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SHANGHAI/BEJING — Shanghai on Monday outlined plans for a return to more normal life 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 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 in place until May 21.

“From June 1 to mid and late June, as long as the risk of infection resurgence is under control, we will fully implement epidemic prevention and control, normalize management, and fully restore normal production and life in the city” , she said .

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The full lockdown of Shanghai and COVID restrictions on hundreds of millions of consumers and workers in dozens of other cities have hurt retail sales, industrial production and jobs, and fueled fears the economy could contract in the second quarter.

Increasingly at odds with the rest of the world, lifting COVID rules despite the spread of infections, the tight restrictions are also sending shockwaves through global supply chains and international trade.

Data on Monday showed that China’s industrial production fell 2.9% yoy in April, a sharp decline from a 5.0% rise in March, while retail sales fell 11.1% yoy after falling in April down 3.5% the previous month.

Both fell well short of expectations.

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Economic activity is likely to have improved somewhat in May, analysts say, and the government and central bank are expected to implement further stimulus measures to speed things up.

However, 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 of the year barring a lockdown similar to Shanghai’s in another major city,” said Tommy Wu, senior China economist at Oxford Economics.

“Risks to the outlook are on the downside as the effectiveness of policy stimulus will depend largely on the magnitude of future COVID outbreaks and lockdowns.”

Beijing, which has been detecting dozens of new cases almost daily since April 22, offers a strong indication of how difficult it is to combat the highly transmissible Omicron variant.

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The capital has not imposed a citywide lockdown, instead tightening curbs ​​to the point where Beijing’s road traffic levels dropped last week to levels comparable to Shanghai, according to GPS data, recorded by Chinese internet giant Baidu.

On Sunday, Beijing expanded work-from-home guidance in four districts. Among other things, it had already banned food offerings in restaurants and restricted public transport.

TRAINS AND PLANES

In Shanghai, the deputy mayor said the city will start reopening supermarkets, convenience stores and pharmacies from Monday, but many movement restrictions would have to last until at least April 21.

It’s not clear how many stores have reopened.

Starting Monday, China’s railway operator will gradually increase the number of trains arriving and departing from the city, Zong said. Airlines will also increase domestic flights.

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Bus and train services will also gradually start operating again from May 22, but people must present a negative COVID test not older than 48 hours to use public transport.

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

Many condominiums received notification last week that they would be in “silent mode” for three days, which usually means they cannot leave the house and in some cases no deliveries will be made. Another message then said that the period of silence would be extended to May 20th.

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

Shanghai reported fewer than 1,000 new cases as of May 15, all indoors under tight controls.

No new cases were found for the second straight day in relatively clearer areas monitored to gauge progress in eradicating the outbreak.

A third day would normally mean that “zero COVID” status has been reached and restrictions can be gradually eased. Fifteen of the city’s 16 counties had achieved “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 the Beijing and Shanghai offices; writing by Marius Zaharia; editing by Robert Birsel)