China’s Covid-19 outbreak is shifting to its south coast, with a flareup in technology hub Shenzhen triggering mass testing and a lockdown of some neighborhoods, while gambling enclave Macau—an hour’s drive away—is racing to stop its first outbreak in eight months.
The new cases come as China’s two most important cities, Beijing and Shanghai, look to be subduing the virus after months of strict curbs and repeated testing.
Shanghai reported nine local cases on Tuesday, while Beijing reported five. Nationwide, China posted 34 new infections on Tuesday.
Yet new clusters continue to emerge, prompting heavy-handed action from local officials fearful of spiraling outbreaks. Its borders are increasingly under pressure, with Dandong—just across the river from North Korea—reporting six local cases. In the city of Jilin to the north east, there were 10 new infections among cold-chain workers.
In Shenzhen, home to companies like iPhone maker Hon Hai Precision Industry Co. and Huawei Technologies Co., isolation orders were imposed for several residential compounds in the Futian and Luohu districts that border Hong Kong after each reported an asymptomatic infection. The restrictions haven’t impacted the companies’ operations, representatives said. The city recorded two local cases on Tuesday.
Hong Kong’s outbreak, meanwhile, continues to grow. It posted 1,186 new local infections on Monday.
Gaming hub Macau shut schools and non-essential businesses after the government found 36 infections as of Monday afternoon, though casinos remain open. The city reported another 47 infections on Tuesday. Fearful of contagion, neighboring Zhuhai on the mainland locked down the area of the border crossing.
The shifting focus of China’s Covid concerns underscores the Sisyphean task of stamping out a pathogen so infectious that the rest of the world has adjusted to living with it. After damaging outbreaks marred the spring, especially in Shanghai, China is facing pressure to boost economic activity ahead of a party congress later this year where President Xi Jinping is expected to clinch an unprecedented third term as leader.
Meanwhile, Beijing’s economy was slammed in May as it contended with Covid outbreaks, a sign that government curbs to contain the virus still had a significant impact even though it managed to avoid a citywide lockdown like Shanghai’s.
Retail sales in the city fell about 26 percent in May from a year earlier, data from the municipal statistics bureau showed. That’s worse than any other provincial-level jurisdiction that has published monthly data so far except for Shanghai, where spending plunged some 37 percent.
Industrial output in the capital city dropped nearly 40 percent in May, worse than Shanghai’s almost 28 percent drop. Beijing blamed the decline on the Covid outbreaks and a high base from last year, according to a statement from the statistics bureau. Shanghai benefited from central government encouragement to keep factories running during the lockdown.
About 14 of China’s 31 provinces and cities have published some May activity data so far, with economic powerhouses including Jiangsu and Guangdong yet to release their figures. The data are based on government statistics and on calculations by Bloomberg News.
The figures suggest that while Beijing didn’t impose a hard lockdown that confined every resident to their homes in the way Shanghai did, the capital’s own strict virus curbs still dealt a heavy blow to the economy. Beijing has rolled out mandatory Covid testing for many residents, business closures and sporadic lockdowns to contain virus flare-ups, depressing consumer spending and other economic activity.
Beijing and Shanghai contribute a sizable portion of the nation’s gross domestic product: 3.5 percent and 3.8 percent, respectively, in 2021. That makes any prolonged economic downturn a major concern for a country that has targeted growth of about 5.5 percent for this year. Many economists think China will miss that target, with the median estimate at 4.3 percent growth for 2022.
Already there was some improvement in Shanghai in May, where lockdown measures were gradually eased ahead of June’s reopening. While the economy stayed in contraction, the decline in industrial output narrowed from a 62 percent drop in April, and the decline in retail sales was smaller than April’s 48 percent. However, both Shanghai and Beijing walked back the unraveling of some restrictions in June to contain Covid outbreaks.
The economic downturn has also stretched to fixed-asset investment in Beijing, which grew only 2.8 percent from January to May—far behind the 6.2 percent national increase. That was also the second-worst reading among the economies that published data so far, behind Shanghai, which saw investment plummet 21.2 percent in the period.
Image credits: Bloomberg
