China lockdowns reach record level as Covid cases spiral

Covid-19 cases in China are spiralling towards record highs, forcing officials to again lock down large swaths of the country.

The world’s second-biggest economy reported nearly 28,000 new Covid cases on Tuesday, with outbreaks in the Chinese capital, the southern manufacturing hub of Guangzhou and the southwestern metropolis of Chongqing continuing to grow.

Chinese officials in Beijing shut most non-essential businesses in the city’s largest district, Chaoyang, which has a population of 3.4mn, and have closed restaurants and other entertainment venues in much of the city, while telling residents to work from home.

“China is seeing a record level of lockdowns,” said Ting Lu, chief China economist at Nomura. “It’s even a bit worse than during the [spring] Shanghai lockdown because so many cities are partially locked down.”

The bank estimates Covid restrictions have hit areas responsible for one-fifth of China’s GDP.

The Shanghai lockdowns slowed economic growth in the second quarter to a 0.4 per cent rise from a year earlier. China’s web of Covid restrictions have continued to batter the economy, with retail sales declining 0.5 per cent in October and industrial output subdued.

The worsening outbreak and increasingly tough measures nationwide come despite demands from Beijing less than two weeks ago to ease up on Covid controls, which sparked a market rally for Chinese stocks.

Growing caseloads in China have since weighed on market sentiment as traders, once hopeful for an economic boost from reopening, become more concerned about intensifying disruption from the lockdowns.

China’s CSI 300 index of Shanghai- and Shenzhen-listed shares was flat on Tuesday but has fallen more than 2.5 per cent from last week’s optimism-driven high over reopening. The benchmark index is down about a quarter year to date.

Beijing’s Center for Disease Control and Prevention said the capital faced “the most complex and challenging” environment since the start of the pandemic, while the city’s top official, Communist party secretary Yin Li, reaffirmed the country’s zero-Covid policy on Monday.

“We must resolutely win the war of pandemic prevention and control, win the blockade battle and the battle of annihilation” of Covid, Yin said in remarks published by state media.

Rising cases have required a growing number of apartment buildings in Beijing to be quarantined, putting local officials and residents under stress. An official at Shilipu, a community in the capital, said he and nine colleagues were struggling to serve more than 7,000 households under home quarantine.

“Our capacity has been stretched,” he said.

In Chongqing, another pandemic hotspot, the arrival on Monday of Sun Chunlan, a vice-premier known for her draconian approach to battling the pandemic, led to widespread panic shopping among local residents, concerned about the potential for a tough Shanghai-style lockdown.

“While I have stocked 10 days of food in my refrigerator, I still feel insecure,” said Dave Yin, a business owner in the southwestern metropolis. “I bought another 5kg of pork and six packages of vegetables just in case.”

The city is building makeshift hospitals to provide 43,063 extra beds on top of the existing 17,000 beds in three hospitals.

Guangzhou, the site of another serious outbreak, continued to report high caseloads, recording 8,210 new infections on Monday. The city has attempted to control the spread of the virus without a citywide lockdown, but on Monday it put its largest district, Baiyun, with a population 3.8mn, into a five-day lockdown.

The move expanded the lockdown from the southern district of Haizhu, which houses many of the city’s garment factories and has already extended its own lockdown several times.

Additional reporting by Nian Liu in Beijing

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