China has been placed on high alert as Covid-19 cases creep up just days before President Xi Jinping is set to start his third term as Communist party leader.
On Sunday, China reported more than 1,700 cases over the previous 24 hours, more than triple the figure from the previous week. The growth in infections follows a week-long national holiday as travellers returned from tourist spots with Covid outbreaks.
“Over the National Day Golden Week holiday, China’s overall Covid situation evidently deteriorated,” Ting Lu, Nomura’s chief China economist, wrote in a note.
The growth in cases is being fuelled by BF.7, a spin-off of the Omicron sub-variant BA.5. The US Centers for Disease Control and Prevention has warned that BF.7 “appears to be more infectious” than previous Omicron strains and predicted it would cause a surge in infections this winter.
As Beijing prepares to host the Communist party congress, the capital has tightened interprovincial travel to prevent residents from returning from their holidays.
Zhang Ke is one of the many Beijingers unable to return home because their health code records them as having been near a Covid outbreak. Many others have taken to social media to complain that they have been locked out of the city, despite not having travelled to a high-risk area.
The 27-year-old hospitality worker visited Zhangjiakou in Hebei province to spend the holiday with her family. She had only been at home a day before her family’s compound was put under lockdown.
“I never left the neighbourhood after coming home from the high-speed railway station,” she said.
Zhangjiakou has not declared a citywide lockdown, but Zhang said “95 per cent of the residential compounds are closed. Shopping malls and supermarkets are closed. No one is on the streets.”
Some analysts were optimistic that Xi would use the congress, which begins next Sunday, to ease his contentious zero-Covid policy that has throttled growth and created a cascade of social and political problems.
But Ting noted that the dismissal of local officials in Hohhot, the capital of Inner Mongolia, for failing to confine an outbreak confirmed that the policy remained “fully intact”.
China’s adherence to zero-Covid has stunted growth, prompting economists to revise down gross domestic growth forecasts for the world’s second-largest economy.
The World Bank forecast that China’s economy would grow 2.8 per cent this year and that its economic output would lag behind the rest of Asia for the first time since 1990. In April, the bank had predicted growth of between 4 and 5 per cent.
Chinese economic data reveal the continued economic damage wrought by the implementation of lockdowns. In September, when Chengdu in Sichuan and Dalian in Liaoning were under lockdown, services activity contracted for the first time in four months.
On Saturday, the Caixin services purchasing managers’ index fell to 49.3 in September, down from 55 in August. Any reading below 50 indicates a contraction in activity.
The threat of lockdowns has also damped consumption. The Golden Week holiday is usually a time of peak domestic tourism and consumer spending when far-flung corners of the country welcome visitors who prop up the local economy.
But this year, battered consumer sentiment and widespread fears of getting caught in lockdowns far from home have severely curtailed travel.
The daily number of passengers travelling around China during this year’s festival week was about 60 per cent below that in 2019. Revenue from tourism fell more than 55 per cent in the same period.
Source: Economy - ft.com
