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Concern on Impact of Covid Curbs in China’s Big Business Hubs

Analysts say ramping up curbs in major trade centres like Shenzhen, Dalian and Chengdu in the southwest could have far more serious impacts than lockdowns in smaller cities.


Covid barriers are erected in Shenzhen, raising concern about the economic impacts of these moves in big Chinese cities.
People watch as barricades are set up outside Wanxia urban village amid Covid containment control moves in Shenzhen, August 29, 2022. Photo: David Kirton, Reuters.

 

Concern is rising about the escalation of Covid restrictions in several large Chinese cities, as officials lock down millions of citizens in Shenzhen and Dalian.

The moves have increased uncertainty and anxiety about China’s wobbly economy, with analysts saying that ramping up curbs in big business hubs like Shenzhen, Dalian and Chengdu in the southwest could have far more serious impacts than lockdowns in smaller centres.

The fresh measures, scheduled to last just a few days currently, reflect China’s insistence on its “dynamic zero-Covid” policy that aims to quash every outbreak as and when they happen.

“Markets could once again be hit in the next couple of weeks, likely triggering another round of cuts by economists on the street,” Nomura warned in a note on Tuesday, highlighting the significance of cities such as the southern technology hub of Shenzhen.

Officials on Tuesday closed various entertainment venues and wholesale market-places, and suspended large events in Longhua, a Shenzhen district with 2.5 million residents.

People must show proof of negative test results within 24 hours to enter residential compounds, and restaurants must limit the number of customers at no more than 50% of their capacity, Longhua’s district authority said. The new curbs are expected to expire on Saturday.

The moves followed similar measures announced on Monday covering three other districts that affected over 6 million in Shenzhen, which has fought multiple outbreaks of Omicron sub-variants this year.

While city officials have not announced a blanket delay to the new school year, six parents with children in primary and middle schools said their schools had notified them of postponements, with many parents expressing anxiety over the uncertainty in parent chat groups.

 

ALSO SEE: China Shuts World’s Biggest Electronics Market Due to Covid

Dalian, Chengdu Both Lock Down 3 Million

In Dalian, a major port in northeastern China important for soybeans and iron ore imports, the main urban areas with around 3 million residents on Tuesday entered a lockdown that is to last until Sunday. Households are allowed to send only one person out per day to shop for daily necessities.

During the lockdown, non-essential workers must work from home, while manufacturing companies are to cut on-site staff and maintain basic and urgent operations only.

In the southwestern city of Chengdu, the districts of Wuhou and Qingyang on Tuesday suspended many venues and tour groups and planned to delay the start of the fall semester for schools, after the district of Jinniu on Monday tightened curbs. The three districts have around 3.5 million residents in total.

 

Shijiazhuang Tells 3m to Stay Home

The northern municipality of Tianjin of 13.7 million on Tuesday started a new citywide Covid testing to identify community infections, the fourth such testing since Saturday.

In the northern city of Shijiazhuang, about 3.5-hours drive from the capital Beijing, four big districts have ordered more than 3 million residents to work from home, excluding essential workers, until Wednesday afternoon.

Mainland China reported 1,717 domestically transmitted Covid infections for Monday August 29, including 349 symptomatic ones and 1,368 asymptomatic infections, official data showed on Tuesday.

Among over 20 provinces, regions and municipalities that reported cases, the region of Tibet, the province of Sichuan, of which Chengdu is the capital, and the province of Qinghai contributed the most daily cases for Monday.

Qinghai’s provincial capital, Xining, with 2.5 million residents, has ordered a lockdown for its main urban areas, halting public transport and restricting movement outside residential compounds. The lockdown, which started on Monday, was scheduled to be lifted on Thursday morning.

In Hong Kong, cases have been rising and government advisers expect infections to hit 10,000 per day this week, triggering concerns that authorities will tighten restrictions which have only just been relaxed.

 

  • Reuters with additional editing by Jim Pollard

 

 

ALSO SEE:

 

China Business Outlook is Worst Since Pandemic Erupted: S&P

 

Falling Business, Consumer Confidence Hinders China Recovery

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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