China reopens after zero-Covid. But there’s a long way to go
Shanghai’s main road is empty during the evening rush hour on Thursday. On December 22, 2022, amid a wave of Covid infections.
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BEIJING — It’s been about two weeks since mainland China abruptly ended most Covid controls, but the country still has a long way to go to return to pre-pandemic normalcy.
In the major cities of Shanghai and Shenzhen, Friday morning rush hour traffic was extremely light, Baidu data showed.
Subway ridership in major cities as of Thursday remained well below the normal range, according to Wind Information.
“Significantly larger than expected waves of COVID are leading to voluntary social distancing, as seen in the empty streets of Beijing in mid-December,” analysts at S&P Global Ratings said in a report on Wednesday.
“Although this wave may subside in the coming weeks, a resurgence is likely during the Lunar New Year festival in late January 2023,” analysts said. “It will be the first time in nearly three years that mass migration will resume in China as families come together.”
On December 7, Chinese authorities scrapped virus testing requirements and health code checks for domestic travel, among other relaxations of what had become an increasingly strict zero-Covid policy. Meanwhile, local infections have started to rise, particularly in Beijing.
Within a week, more than 60% of staff at a Beijing-based company tested positive for Covid, said Michael Hart, president of the American Chamber of Commerce in China.
“Two weeks later, we can get people back into the office,” he said on Friday. “Basically we fell really fast. It looks like we’re bouncing back really fast.”
Friday morning traffic in Beijing had recovered slightly from a week ago, pushing the capital back into the top spot as the country’s most congested city, according to Baidu data. But figures showed that the level of congestion in Beijing was still around 25% lower than last year.
The exit from strict COVID-related restrictions is positive for China’s economic activities. However, a resurgence in infections could diminish the gains.
In a survey of nearly 200 AmCham China members from December 16-19, more than 60% of respondents said they expected the impact of the latest Covid outbreak to be over in one to three months, Hart said.
Respondents did not report any major supply chain issues, Hart said, noting that many companies are likely holding on to more inventory after Shanghai’s lockdown disruptions earlier this year.
However, he said most of those surveyed said they were unable to predict the long-term impact of the outbreak on their business.
As for foreign direct investment in China, Hart said he expects it will take about a year after travel fully reopens for such investment to begin to recover.
China has yet to change its quarantine policy for international travelers to the mainland. Arrivals must currently be quarantined for five days in a centralized facility, followed by three days at home.
Other data pointed to a recovery in domestic travel.
Flight bookings from Beijing from Monday to Wednesday were up 38% from the previous week, while prices for economy class rose 20%, according to Qunar data cited by Chinese media Sina Finance. CNBC was unable to independently confirm the report.
Chinese travel site Trip.com said that from December 7 to 18, flight bookings to the tropical island province of Hainan rose 68% from the previous month. Hotel reservations in Hainan last week were up 20 percent from the previous week, Trip.com said.
As the city of Beijing appears to be emerging from a wave of Covid, outbreaks have hit other parts of the country.
In the southern cities of Shenzhen and Guangzhou, there are far fewer people on the streets, said Klaus Zenkel, vice president of the EU Chamber of Commerce in China and president of its southern China chapter. . He estimated that road traffic had dropped by 40%, implying an infection rate of around 60%.
Most companies are following guidelines that only ask employees to stay home if they have a fever or strong Covid symptoms, Zenkel said Thursday. “That means [the] the workforce will be reduced, let’s just hope not everyone gets sick at the same time.”
Lack of data
There are few official figures on the upsurge in infections or deaths from the latest Covid outbreak in China.
World Health Organization emergencies director Mike Ryan told a briefing on Wednesday that China was likely unable to cope with the surge in infections.
“In the case right now in China, what is being reported is a relatively low number of cases in hospital or a relatively low number of cases in ICUs, whereas anecdotally there are reports that these ICUs are fulfill,” Ryan said, according to an official transcript. .
“In a fast-moving wave, you might have reported three days ago that your hospital was fine,” he said. “This morning it may not be going well because the wave has come and all of a sudden you have a very high infection force.”
Most people have been self-testing for the virus after most mandatory tests were dropped. Last week, the National Health Commission also stopped reporting asymptomatic cases.
“The government had been [holding] daily press conferences telling you how many people have been infected,” AmCham’s Hart said. “Then they didn’t go to any information.
He said the lack of official announcements made it easier for rumors to spread. Hart also said interactions with government groups indicated their offices were infected and implementing work from home at a rate similar to what businesses had seen.