Shanghai aims to return to normal on June 1 as COVID lockdown hits economy

SHANGHAI/BEIJING, May 16 (Reuters) – Shanghai laid out plans on Monday to end a painful COVID-19 lockdown that has lasted more than six weeks, battering China’s economy and returning to more normal life from June 1.

In the clearest timetable yet, Vice Mayor Zong Ming said Shanghai would reopen in stages, with most movement restrictions in place until May 21 before easing policies to prevent a rebound in infections.

“From June 1 to mid-to-late June, as long as the risk of epidemic rebound is under control, we will fully implement epidemic prevention and control, normalize management, and fully restore normal production and life in the city,” she said.

But the announcement was met with skepticism by some Shanghai residents, who have been disappointed time and time again by the changing timeline for lifting restrictions.

“Shanghai, Shanghai… Should I still trust you?” one member of the public said on the Weibo social media platform.

The sweeping lockdown in Shanghai and the Covid-19 restrictions on hundreds of millions of consumers and workers in dozens of Chinese cities have caused economic pain across industries, fueling fears that the economy may contract in the second quarter.

The restrictions are increasingly out of sync with the rest of the world, which has been lifting COVID rules even as infections spread, sending shockwaves through global supply chains and international trade.

Data on Monday showed China’s industrial output and retail sales fell at the fastest pace in more than two years in April, less than expected.read more

Recent numbers have been dismal: Food and beverage revenue fell 22.7%; car sales plunged 47.6%; real estate sales by value fell 46.6%.read more

Economic activity may have improved in May, with governments and central banks expected to deploy more stimulus to pick up the pace, analysts said.

But given China’s firm “zero-coronavirus” policy of eradicating the outbreak at all costs, the strength and durability of the rebound is uncertain.

“These data paint a picture of a stagnant economy that requires more aggressive stimulus and a rapid easing of COVID restrictions, neither of which is necessary,” said Mitul Kotecha, head of emerging markets strategy at TD Securities. Very likely soon.” .

Slower growth in China will “contribute to a further deterioration of the global economic outlook,” he said.

Data overshadows Shanghai’s reopening plan, boosting Chinese stocks (.CSI300) reduce.read more

In Beijing, dozens of new COVID cases have been detected every day for the past three weeks, suggesting that even small outbreaks are difficult to eradicate.

Beijing has not imposed a city-wide lockdown, but has tightened restrictions so much that road traffic levels last week were similar to those of locked-down Shanghai, according to data tracked by Chinese internet giant Baidu.

On Sunday, Beijing expanded work-from-home guidance in four regions. It has already banned dine-in service in restaurants and reduced measures such as public transportation, adding to the frustration.

Videos circulating on social media overnight showed some students at Peking University demanding the removal of fences around some dormitories to keep out the coronavirus. Reuters could not immediately verify the authenticity of the video.

“Please don’t lie”

In Shanghai, the deputy mayor said the city will reopen supermarkets, convenience stores and pharmacies from Monday, but movement restrictions must last until at least May 21.read more

It is unclear how many businesses have reopened.

From Monday, operators will gradually resume train services and domestic flights, she said. Bus services will gradually resume from May 22, but people must show a negative COVID test within 48 hours to use public transport.

Throughout the lockdown, Shanghai had to repeatedly dash hopes for an end to the ordeal. Authorities expect it will only last until April 5, when it was launched on March 27.read more

Last week, many residential complexes were notified that they would be in “silent mode” for three days, which usually means being unable to leave the premises and, in some cases, deliver. Another notice that followed said the silence period would be extended until May 20.

“Please don’t lie to us this time,” another Weibo user said, adding a crying emoji.

Shanghai reported fewer than 1,000 new cases on May 15, all within the strictest controls.

In relatively liberal areas, those monitored to measure progress in eradication, saw no new cases for the second day in a row.

Day three usually means “zero COVID” status has been reached and restrictions can begin to ease. Fifteen of the city’s 16 boroughs have reached “zero COVID.”

Beijing reported 54 new cases, up from 41.

Reporting by Brenda Goh in Shanghai; Kevin Yao, Wang Yifan and Muyu Xu in Beijing; and the Beijing and Shanghai bureaus; Writing by Marius Zaharia; Editing by Robert Bethel

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