More parts of China are battling Covid, threatening a lockdown if cases rise

Covid-related restrictions have been tightened in parts of China as the number of local cases rose, while lighter measures such as virus testing in Shanghai remain in place, pictured here on July 3, 2022.

Qilai Shen | Bloomberg | Getty Images

BEIJING — Just days after China eased some Covid controls, virus cases in different parts of the country have put new regions on high alert.

According to Ting Lu, chief economist for China at Nomura, the number of cities restricting local movement has more than doubled in a week to 11 on Monday, up from five a week earlier.

The latest measures affect regions that account for about 14.9% of China’s GDP, up from 10.1% a week earlier, Nomura said.

The daily number of Covid cases in mainland China, including those without symptoms, has risen from a handful of cases to around 200 or 300 new cases in the past few days. Most are asymptomatic.

Many of the new cases are in the Shanghai region. The nearby city of Wuxi, in Jiangsu province, said late Saturday that bars and gyms would have to close temporarily, while restaurants could only offer take-out food.

Last week, a far smaller region called Si County in neighboring Anhui province ordered residents to stay in their homes and only leave them at designated times for virus testing.

In June, Beijing and Shanghai tried to resume normal business after weeks of restrictions that had kept children out of schools and essentially closed many restaurants. The south-eastern metropolis of Shanghai was by far the hardest hit and was sealed off for April and May.

Last week, mainland China shortened the quarantine period for international travelers and close contacts of Covid cases. The country also changed a nationwide travel system that would theoretically make it easier to move around the country.

The daily number of Covid cases in Beijing and Shanghai has fallen to single digits or zero in recent days.

“Markets may get a little too complacent by ignoring the rise in Covid cases and underestimating the cost of continued Covid containment measures,” Nomura’s Lu said in a report on Monday.

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In addition to new mainland cases in economic hubs like Jiangsu province, Lu noted the spread of Covid in nearby economies – evident in Hong Kong’s rising case count and Taiwan’s daily average of more than 100 new deaths over the past week.

Mainland China has not reported any new deaths from Covid for weeks.

“We have been in the upswing phase of China’s ‘Covid Business Cycle (CBC)’ since late May, thanks to a drop in the number of Covid-19 cases, the lifting of lockdowns and other relaxations of the Zero Covid Strategy (ZCS). Restrictions and stimulus measures,” he said. “However, another wave of Omicron could result in a return to a downturn phase, although the timing of such an event is uncertain.”