An aerial view of people queuing for COVID-19 nucleic acid testing on February 26, 2022 in Dongguan, Guangdong province.
VKG | Visual Chinese group | Getty Images
BEIJING — China’s worst outbreak of Covid-19 since the pandemic’s initial wave escalated on Tuesday when a major industrial city ordered a halt to production.
China’s National Health Commission said on Tuesday that recent outbreaks in 28 provinces have infected more than 15,000 people and are mostly linked to the highly contagious omicron variant, according to state media. There are 31 provincial-level regions in China.
Although the northern province of Jilin accounts for the majority of cases, the latest outbreak has hit major cities such as Shanghai’s financial hub and Shenzhen’s technology hub.
On Tuesday, the city of Dongguan in the southern province of Guangdong ordered business employees to work from home and placed a lockdown on residential areas, allowing only essential activities such as grocery shopping and virus testing.
The city has taken a targeted approach to shutting down production. In industrial parks where no cases have been reported, businesses can maintain core production under stringent virus control measures. Factory workers often live in dormitories close to where they work.
The statement said that in areas where local cases are reported, businesses should stop production. The measures came into force at noon on March 15 and will last for about a week, until the end of the day on March 21.
Guangdong produced about 24% of China’s exports in 2020, according to the latest available official data obtained through Wind Information. The database showed that among cities of its size, Dongguan was the fifth largest contributor to China’s GDP last year, with an output of 1.09 trillion yuan ($170.31 billion).
Dongguan reported nine confirmed Covid cases and 46 asymptomatic cases on Monday. The nearby Shenzhen Technology Center, also in Guangdong, reported 60 new cases, including asymptomatic cases.
Monday’s total of local cases in mainland China included 3,507 new confirmed Covid cases and 1,647 asymptomatic cases, mostly in the northern province of Jilin. This is more than double what it was the day before.
In China, growth is expected to slow sharply in March as it faces its worst Covid outbreak since 2020.
Larry Hu
Chief Economist for China, Macquarie
On Tuesday, a Chinese statistics bureau official downplayed the impact of Covid-related restrictions on economic activity after reporting higher-than-expected data for January and February.
Economists said China’s Covid policy, which uses travel restrictions and area lockdowns to control outbreaks, is having more of an impact on consumer spending than on manufacturing.
But the latest wave of cases exceeds the hotspots China has faced since the height of the initial pandemic in early 2020.
Sales of KFC and Pizza Hut have fallen
Fast food chain Yum China said sales were hurt by the outbreaks.
“Our operations have been significantly impacted by recent outbreaks and tightening public health measures, resulting in a further reduction in social activity, travel and consumption,” Yum China, which operates Pizza Hut and KFC in the country, said on Monday.
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Same-store sales for the first two weeks of March fell about 20% year-on-year and “still on a downward trend,” the company said. The number of its stores that are temporarily closed or only offer takeout and delivery has more than doubled, Yum China said. In January, there were more than 500 such stores, and as of Sunday there were more than 1,100.
Yum China’s sales at the same stores fell by about 40-50% year-over-year during the 2020 Lunar New Year, when Covid first hit China.
“China is expected to slow growth sharply in March as it faces its worst Covid outbreak since 2020,” Larry Hu, Macquarie’s chief China economist, said Tuesday. -zero ahead of growth.