Health workers wearing protective gear as a measure against the Covid-19 coronavirus walk down a street in the Jing’an district of Shanghai, March 26, 2022.
Hector Retamal | AFP | Getty Images
BEIJING — China’s largest city Shanghai began a two-stage lockdown on Monday as authorities tried different strategies to sustain growth while trying to control the country’s worst Covid-19 outbreak since the pandemic began.
Shanghai, a city of 26 million people on China’s southeast coast, is a center for finance and international business in the country. The city is also home to the world’s largest container shipping port.
The lockdown measures include orders to work from home and the suspension of local public transport and ride-hailing, the city of Shanghai said Sunday night. Previously, only certain neighborhoods had been temporarily closed to control outbreak hotspots.
The first phase runs from Monday to Friday morning and applies to the eastern part of the city, where the financial center is located, the city said. The second phase will affect the western part of the city and will run from Friday morning until the afternoon of the following Tuesday, April 5, city authorities said.
“The lockdown and mandatory district-to-district testing in China’s largest city, major transportation hub and financial center will most likely disrupt the city’s business operations,” said Bruce Pang, China Renaissance’s head of macro and strategy research.
“We believe China will stick to its zero-tolerance approach in the short-term [its] Zero Covid position as one of the world’s strictest virus elimination policies,” Pang said.
Tesla, whose Shanghai factory is located in the area affected by the first phase of the lockdown, reportedly suspended production for at least a day on Monday, according to Bloomberg, citing sources. The electric car maker did not immediately respond to CNBC’s request for comment.
The advent of the highly transmissible Omicron variant has complicated outbreak control and increased uncertainty for business operations. Local governments across China have attributed the recent spate of cases to Omicron subvariant BA.2.
China has stuck to a strategy of lockdowns and quarantines to control Covid outbreaks while maintaining economic growth. The policy helped the country recover from the initial shock of the pandemic in early 2020, with relatively few infections and deaths compared to other parts of the world.
This time around, economists don’t expect lockdowns that only last about a week to have a major impact on the economy throughout the year. Travel restrictions and homestay measures are having a greater impact on consumer spending and services than on factory production, as workers can often remain on-site in industrial parks.
With targeted measures
In Shanghai, officials have stressed in recent weeks that the city would not lockdown and instead would take a neighborhood-specific approach. Even in Sunday’s announcement, the city claimed the two-part lockdown was for conducting batch virus tests.
Shanghai International Port Group, which manages the city’s ports, said in an online statement Monday that production units have been operating around the clock except during extreme weather conditions.
CNBC Health & Science
Read CNBC’s latest global coverage of the Covid pandemic:
And instead of imposing a blanket ban on entering and exiting Shanghai during the two-tier lockdown, authorities said people in the city who plan to leave by highway, train or plane should register within 48 hours of departing need a negative virus test.
Shanghai’s two airports, including one that focuses on international travel, and three train stations are still operating normally, the city’s transportation authority said Monday morning.
Surge in cases without symptoms
New confirmed cases in the city continue to rise, with an even higher number of asymptomatic cases.
Shanghai reported 3,450 asymptomatic cases for Sunday, the most for any provincial-level region in mainland China. The city reported 50 new confirmed Covid cases for the same day.
All 3,500 people affected are in isolated treatment or medical observation, the city said.
The latest March 15 update of the National Covid Prevention and Control Policy states that mild and asymptomatic cases can be treated in quarantine centers rather than requiring hospital care, which would add to China’s already overburdened health system.
Read more about China from CNBC Pro
Nationwide, the northern province of Jilin accounts for most of the newly confirmed locally transmitted cases — 1,086 of the 1,219 reported for the mainland on Sunday. Although the latest wave of Covid has reached provinces across China, the number of new confirmed cases per day is below 10 in most regions.
The capital Beijing reported no new locally transmitted confirmed cases or asymptomatic cases for Sunday.
In an indication of how authorities are trying to restrict cross-border travel, China’s national rail operator announced Saturday that travelers will not be able to book tickets for April 8 or future dates. Sales for these later times are due to resume on April 2, the rail operator said.