China closes Shanghai to stop new wave of Covid from spreading

(ORDO NEWS) — China’s largest city, Shanghai, began a two-stage lockdown on Monday as authorities scramble to use various strategies 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 the center of finance and international business in the country.

The city also hosts the world’s largest container shipping port. The lockdown measures include orders to work from home, as well as the suspension of public transport and taxis, the city of Shanghai announced on Sunday evening.

Previously, temporary lockdown measures were taken only in certain areas to deal with outbreaks. The initial phase will run from Monday to Friday morning and will extend to the eastern part of the city, where the financial center is located, the city said.

The second phase will operate in the western part of the city from Friday morning until noon next Tuesday, April 5, municipal authorities said.

“The lockdown and mandatory screening of every district of China’s largest city, a key transportation hub and financial hub, is likely to disrupt the city’s commercial activities,” said Bruce Pang, head of macroeconomic and strategic research at China Renaissance.

“We believe that in the near term, China will take a zero tolerance approach, continuing [its] position of zero Covid as one of the world’s most stringent virus eradication policies,” Pang said.

Tesla, whose Shanghai plant is located in the area covered by the first phase of the lockdown, stopped production for at least one day on Monday, Bloomberg reported, citing sources.

The electric vehicle company did not immediately respond to CNBC’s request for comment. The advent of the highly transmissible omicron variant has made outbreak management more difficult and increased uncertainty in business operations.

Local governments across China have classified the latest wave of cases as sub-option omicron BA.2. China is pursuing a lockdown and quarantine strategy to deal with Covid outbreaks while maintaining economic growth.

This policy has helped the country recover from the initial shock of the pandemic in early 2020, with relatively few infections and deaths compared to other regions of the world.

This time around, economists don’t expect the lockdown, which lasts just a week or so, to have a significant impact on the country’s economy throughout the year. Travel restrictions and stay-at-home measures impact consumer spending and services more than industrial production, as workers can often stay at their jobs in industrial parks.

Use of targeted measures

In Shanghai, officials have been emphasizing in the past few weeks that the city will not be shutting down, but will use a neighborhood-based approach. Even in Sunday’s announcement, the city said a two-part lockdown had been put in place to conduct virus testing on batches.

Shanghai International Port Group, which manages the city’s ports, said in an online statement on Monday that, barring extreme weather conditions, manufacturing units are operating around the clock.

Instead of a complete ban on entry and exit from Shanghai during the two-stage lockdown, authorities said people in the city wishing to leave – by highway, train or plane – would have to test negative for the virus within 48 hours of leaving. Shanghai’s two airports, including one dedicated to international travel,

Spike in cases without symptoms

The number of new confirmed cases in the city remains elevated, and the number of asymptomatic cases is even higher. Shanghai reported 3,450 asymptomatic cases on Sunday, the highest number of any provincial region in mainland China.

On the same day, 50 new confirmed cases of Covid were reported in the city. All 3,500 cases are under isolated treatment or under isolated medical supervision, the city said.

The latest update of the National Covid Prevention and Control Policy on March 15 says mild and asymptomatic cases can be treated in quarantine centers rather than needing hospital care, which would put more strain on China’s already strained healthcare system.

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