Shanghai aims to defeat Covid over next week as Beijing hunkers down

Easing weeks of punishing restrictions in the commercial hub would bring relief to China's battered economy, although there is growing concern that Beijing may yet take a similar course of action if it fails to get a nascent outbreak under control.

Shanghai's deputy mayor, Wu Qing, said the city of 25 million aims to eliminate Covid outside of quarantined zones within the next week or so.

After that, the city's lockdown will be "lifted in batches", with shops opened and traffic restictions eased, he said in the announcement which confirmed a Reuters story from Sunday.

The vast majority of Shanghai's more than 2,000 new cases are in areas already under the tightest controls, while those found in the relatively freer communities are the ones most closely watched for clues as to where Shanghai's outbreak is heading.

The number of such cases rose to four on May 12, up from two the previous day.

Last week, some of Shanghai's residents were allowed outside their housing compounds for brief walks and grocery shopping but the city has in recent days been tightening curbs.

More and more areas have entered what authorities call "silent management mode", which typically means boards or fences around buildings, no deliveries and residents once again stuck indoors.

Beijing's daily Covid caseloads are a fraction of Shanghai's, but there are signs the worst may still be to come in the capital.

Beijing reported 51 new cases on Friday, of which 11 were not in the so-called "controlled areas" under the tighest restrictions.

It is the highest number of cases found in the community at large since April 29, when Beijing started to provide clear data on where cases had been found.

Amid a growing sense of caution, Beijing officials late on Thursday denied rumours of an imminent lockdown, urging people not to panic-buy but to stay at home. They also announced a new round of mass testing across most of the city.

Authorities in the capital had already banned dine-in services at restaurants, closed some malls, entertainment and tourist venues, suspended sections of the bus, subway and taxi systems and imposed lockdowns on some residential buildings.

"It is very inconvenient to travel about the city now," said Beijing resident Harry Liang, 30.

Covid curbs have placed hundreds of millions of people in dozens of major cities under various degrees of restriction, hurting consumption and manufacturing, and disrupting trade and global supply chains.

Officials in Shanghai, China's most populous city and its commercial centre, said economic activity was gradually resuming, with many factories operating in "closed loop" systems, with workers living on site.

More than 9,000 large-scale enterprises in Shanghai were now operating at close to 50 percent capacity, officials said.

Still, some economists expect China's economic growth to slow sharply in the second quarter, or even shrink, endangering the annual growth target of about 5.5 percent.

China's yuan fell to its weakest since September 2020.

Han Wenxiu, deputy head of the Communist Party's office for financial and economic affairs, said on Thursday that China would not hesitate to introduce new policies to prop up growth.

With youth unemployment at 16 percent, China will take steps to improve job prospects for college graduates, its cabinet said on Friday.

The government has been cutting taxes for businesses and channelling more funds into infrastructure projects, while the central bank has been pumping more cash into the economy.

While travel curbs in much of the rest of the world are easing as countries try to learn to live with Covid, China said on Thursday it would "strictly limit" unnecessary foreign trips by its citizens.

Most international flights to and from China have been cancelled over the past two years but the announcement by immigration authorities was the clearest sign yet that travel will not resume any time soon.

"I can't do anything right now," a Shanghai resident who identified himself only as Mr Ma due to the sensitivity of the matter told Reuters.

"The government is squeezing the freedom," added Ma, who has made plans to travel the world with his young family following the trauma of the recent Shanghai lockdown.

China has rejected criticism of its uncompromising "zero Covid" policy, saying that saving lives is worth the huge short-term costs and that activity would gradually resume once outbreaks are eradicated.

"Whoever bets that China is at risk of a self-inflicted recession will suffer the consequences of their mistakes," state-backed nationalist tabloid the Global Times said in an editorial.