Shanghai faces ‘huge’ pressure to stay Covid-free as lockdown nears end

Residents counting down days to end of lockdown after two months of isolation

Health authorities in Shanghai faced "huge" pressure to keep China's most populous city free of Covid-19 as residents were counting down the days until June 1st when their lockdown is set to end after almost two months of isolation.

The commercial hub of 25 million achieved a fourth consecutive day without any new infections in the community, holding on to its prized “zero Covid” status and keeping alive hopes for an imminent end to lockdown misery.

Despite no new cases, authorities are not lifting the lockdown immediately, instead gradually easing restrictions until the start of next month, with some shops allowed to open this week and public transport expected to partly resume over the weekend.

Residents at housing compounds across Shanghai have been given passes that allow one person from each household to go out for a few hours at a time. Some can go out only twice a week and only within a few streets of their home.

To get into a supermarket, they also need a pass from the shop.

“The risk of finding positive infections among risk groups still exists and the pressure of . . . preventing a rebound remains huge,” Zhao Dandan of the municipal health commission told reporters on Wednesday.

As part of the gradual reopening, Shanghai authorities issued a list of 864 financial institutions that can resume work, three people with knowledge of the matter said.

Defeating the highly transmissible Omicron variant has proven an uphill battle, as the struggle in the capital, Beijing, over the past month has shown.

Overall, Shanghai reported fewer than 1,000 new cases for May 17th, none from outside quarantined areas. Beijing reported 69 cases, up from 52.

The capital has been discovering dozens of new cases almost every day since April 22nd.

While most Beijing residents are working from home, they can at least wander about outside, albeit with few places to go, as many shops, gyms and other businesses have closed.

“I’m happy that we are not confined at home like in Shanghai but still pretty frustrated at what’s happening, as most of the countries have already moved on from Covid,” said Lin Cong (27) who lives in Beijing’s Chaoyang district.

Poverty

Meanwhile, China’s cash-strapped local governments have been forced to divert funds from poverty alleviation and infrastructure to finance mass coronavirus testing.

An official in the northeastern city of Jilin said authorities had earmarked a "significant" portion of state-backed funds intended to reduce poverty to buy PCR tests, after an outbreak that has infected more than 26,000 people since March.

In the southern industrial hub of Quanzhou, local officials said an ambitious infrastructure investment plan had slowed in part because the authority reallocated funds to testing following an outbreak that has infected more than 3,000 people over the past two months.

The testing mandate could cost up to 1.7 trillion renminbi (€238 billion), or 9 per cent of China’s fiscal income in 2021, per year, according to Dongwu Securities.

The need to fund testing has prompted Quanzhou to scale back its Rmb185 billion infrastructure investment plan this year. The city reported an 8.2 per cent drop in fixed investment in March, compared with a 6.6 per cent increase nationally.

A local official blamed the decline partly on the need to use construction funds on testing. “The central government wants us to eliminate the pandemic and to step up infrastructure construction,” the person said. “We cannot do both and the priority is to create a Covid-free city.”

Local governments "are draining key resources away from economic growth and putting them to testing", said Andrew Collier, managing director at Orient Capital Research.

“Their economies are going to be in an even worse shape than they already are.”

– Copyright The Financial Times Limited 2022, Additional reporting: Reuters