A handful of cases bring Shanghai into lockdown again

sHanghai will briefly lock down nearly everyone in the city this weekend for mass testing as cases of Covid-19 continue to surge, causing more disruption and triggering a new rush on groceries days after coming out of an exhausting two-month shutdown.

The plan grew out of an area with a handful of cases and spread within hours to 14 of the 16 districts in the financial center. It covers nearly all of the city’s 25 million residents as health officials use tests to eradicate any silent transmission of the virus, a key tool in China’s Covid Zero arsenal.

The rapid escalation reflects continuing concern over Shanghai, which implemented one of the world’s strictest lockdowns in late March after an initial slow response to the outbreak. The latest move follows a rebound in community infections to six on Thursday from zero the day before. Residents will be released after testing, but will return to confinement if new infections are found in their compounds.

See More information: Shanghai’s COVID-19 lockdown pushes residents to the edge

There were 5 additional infections found among people in quarantine on Thursday, for a total of 11 cases in the financial center, health officials said. Nationwide, China added 73 infections.

The return to lockdowns in Shanghai underscores the difficulties of China’s attempts to eliminate the virus while the rest of the world accepts it as endemic. The disruption caused by the pandemic restrictions impacted production at companies such as Sony Group Corp. and Tesla Inc., with the electric car maker just now normalizing operations at its factory south of Shanghai.

The renewed restrictions are still not having a significant impact on financial markets.

A police officer guards a locked residential area in Shanghai, China, Tuesday, June 7, 2022.

RAY YOUNG/ Featured China/ Future publication via Getty Images

“Investors are watching, but there is not much reaction at the moment given the outbreaks,” said Kevin Li, fund manager at GF Asset Management (Hong Kong) Ltd. so that will lead to some volatility.”

The benchmark CSI 300 index was up 1.2% at 2:20 pm local time, cutting back on earlier losses. On the week, the high is about 3.3%.

One of the main clusters is centered on the Red Rose Salon in Xuhui District, where services were in high demand after reopening after the lockdown started in late March. Three infections were linked to the salon during Thursday’s briefing, including two in employees living in Minhang, the district that has seen the most recent cases.

See More information: China’s public is divided over the Zero-COVID approach

Some officials at the state hall did not conduct daily Covid tests, officials said at a briefing on Thursday.

Of the six community cases, four were found in Minhang, a district of 2.65 million in southwest Shanghai. Minhang – a predominantly residential area – will be sealed off Saturday morning for mass testing, according to a statement. Many other districts are also testing on Saturday, although several did not specify dates or times.

Only two districts with less than 2 million inhabitants, Putuo and Chongming, are not on the testing list.

Health workers prepare to collect a swab sample from a man in Shanghai’s Jing’an District, early June 7, 2022


China doubles on Zero-COVID

The latest moves quickly reach the villagers. That prompted some to flee their apartment complexes and sparked a rush to supermarkets after many struggled to get fresh fruit and vegetables in the early days of the original lockdown. While the latest restrictions could be lifted in just a few hours if no new infections are found, a further two weeks of isolation could be imposed for areas where new chains of transmission are discovered.

Most economists say it will be difficult for China to meet its annual growth target this year because of the lockdowns. By having zero tolerance for new cases, the country runs the risk of being in a constant cycle of imposing and easing restrictions.

Still, President Xi Jinping continues to emphasize the country’s adherence to a policy that has had one of the lowest Covid death rates in the world. Xi called for Covid Zero to be adhered to “uncompromisingly” on a visit to Sichuan province on Thursday, according to the official Xinhua news agency, saying it must be achieved in balance with the needs of the economy.

See More information: The Rising Costs of China’s Zero-COVID Policy

The remarks echoed sentiments from mid-March, when Xi first called on Chinese authorities to reduce the financial impact of Covid-19 measures. Shanghai authorities worked to allow manufacturers to establish so-called closed-loop systems in their factories, which allowed them to continue operating. The settings create a bubble in which workers just go to and from the factory, sometimes living on site, and are regularly tested for Covid incursions.

The threat of disruptive measures also returned to Beijing on Thursday, with the resumption of mass testing in several neighborhoods of the capital’s main Chaoyang district, company headquarters and embassies. A Covid outbreak in a bar ended a five-day streak of zero community spread. Beijing reported eight new local Covid cases on Thursday.

There are signs that China is trying to use ubiquitous and affordable testing as a way to avoid costly lockdowns. Special testing kiosks are being installed on street corners in major cities so that residents are never more than 15 minutes away from a PCR testing opportunity. The idea is that constant testing — a negative test is required to enter shopping malls and even parks in some places — finds the first transmission chains before they get out of hand.

Infections are also spreading in northern China, with outbreaks in Inner Mongolia and Dandong, a city on the border with North Korea, which recently acknowledged what it claimed was its first Covid outbreak.

With assistance from Winnie Zhu, Helen Sun, Linda Lew and Catherine Ngai

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