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Shanghai locks down half of city to fight Covid outbreak

(Bloomberg) — Shanghai will lock down the city in two phases to conduct a massive testing blitz for COVID-19, as authorities scramble to contain a spiraling outbreak that has engulfed the virus like never before. challenging China’s zero-tolerance approach.

At 5 a.m. on Monday, the city of 25 million people closed off areas east of the Huangpu River for four days, including its financial district and industrial park. According to a statement from the local government on Sunday, the lockdown then shifts to the other half of the city, to the west, for another four days.

Residents will be barred from stepping out of their homes, while public transport and car services will be suspended. Private cars will not be allowed on the roads unless necessary. Tesla Inc. is halting production at its Shanghai plant on Thursday, people familiar with the matter said. Some financial companies rushed to call employees to offices before the lockdown and asked employees to prepare to sleep there.

The sweeping restrictions come as China experiences its worst COVID-19 outbreak since the virus emerged in Wuhan, with more than 6,000 locally acquired cases reported across the country on Sunday. The outbreak is testing the country’s virus strategy, which is proving harder to prosecute amid more infectious forms and dragging on the world’s second-largest economy as the rest of the world returns to normal.

According to Bloomberg News calculations, about 62 million people in the country are either in lockdown or facing imminent lockdown.

China recently moved towards a more targeted approach to dealing with flareups as part of President Xi Jinping’s twin goals of seeking to eliminate the virus while minimizing the economic and social impacts of the Covid Zero strategy. But the rapid rise in cases in Shanghai underscores the limits of such measures in the face of highly permeable Omicron strains.

“The failure of the targeted lockdown model is a major setback as Shanghai is tested to explore alternative models to reduce social costs for China,” Overseas-Chinese Banking Corp. Analysts Tommy Zee and Herbert Wong wrote in a report. “This could delay China’s plans to ease its dynamic zero COVID policy.”

Shanghai’s move comes after authorities earlier this month shut down the tech hub of Shenzhen in the south, the most economically strategic city to come under such restrictions. More than 3,200 kilometers (2,000 mi) to the north, Jilin, which borders Russia, saw its capital shut down on March 11 and the entire province a few days later. The center of auto-making, this area is still closed.

Infections in Shanghai, the Chinese headquarters of several international companies and the country’s largest port, have climbed in recent days despite repeated and expanded testing. The financial center reported nearly 3,500 new infections on Sunday, overtaking Jilin as the country’s biggest Covid hot spot, according to a CCTV report.

Exchange, Harbor

The Shanghai Stock Exchange will move many services online, and extend the time window for listed companies to issue statements at 11 p.m. local time. Firms will also be able to apply for deferment of publication of their full year’s earnings. The city postponed the auction of 36 land sites. And those who wish to depart from Shanghai will need to get a negative COVID result.

The Securities Times reported that the port of Shanghai, the world’s largest, will maintain operations during the lockdown. Wu Jingle, director of the Shanghai Heath Commission, said at a news conference on Monday that airlines, railways, global passenger and cargo transport are all operating normally during the new round of nucleic acid testing.

McDonald’s closed stores and ceased services in Pudong. Delivery platform Meituan showed that Pizza Hut and KFC had stopped deliveries in the district, although some smaller non-chain restaurants were still able to provide services. Century Link Shopping Mall said it would cease operations for four days.

Instant noodle maker Nongshim Company will shut down operations at its Shanghai plant between March 28 and April 1 and may extend it depending on the lockdown situation. Chipmaker SK Hynix Inc, as well as Hyundai Oilbank Company have asked employees to work from home.

The lockdowns in Shenzhen and now Shanghai, two of China’s most economically important cities, reflect the growing toll – and challenge – of maintaining a zero-tolerance approach to the virus amid more communicable forms. While most countries have started living with Covid, acknowledging it as endemic, China is maintaining its strategy of closing borders, mandatory quarantine and mass testing, even as it continues on the day. becomes more difficult.

Nomura Holdings Inc. During the first wave of COVID-19, China’s economy is facing its worst pressure since the spring of 2020, economists wrote over the weekend. Shanghai contributes 3.8% to the country’s GDP, as calculated by Bloomberg News. And it is the second-richest city, surpassing only Beijing, according to the latest available data from the National Bureau of Statistics.

For Shanghai, the latest restrictions mark a departure from the city’s previous approach, which was more targeted when it comes to restrictions and testing. Officials there had resisted a full-blown lockdown to avoid disruption to businesses, only to see the highly contagious Omicron variant continue to spread.

As Covid cases began to rise this month, Shanghai responded by closing schools and suspending all cross-province bus services. An increasing number of residential towers around the city have been closed sporadically over the past few days due to suspected cases.

In its statement issued on Sunday night, Shanghai’s government said it would ensure basic supplies such as electricity, fuel and food during the lockdown period.

Still, the surprise announcement immediately created a rush for groceries as residents sought to stock up on necessities before the first lockdown.

Over the past week, many Shanghai residents have been hoarding supplies because of uncertainty over the construction of the lockdown – the city’s strategy so far – and a shortage of delivery drivers. Shanghai police last week detained two people on suspicion of spreading rumors that a total lockdown was being imposed across the city.

Officials stressed that the emergency medical needs of citizens would be guaranteed during the lockdown. The health commission’s Wu said medical institutions need to provide a “green channel” for patient reception, and communities can arrange for “closed-loop transportation” for special cases.

A nurse died of asthma on Wednesday night after being turned away from Shanghai East Hospital due to the closure of the emergency department for disinfection under COVID control rules. She later died in another hospital, according to a statement from the medical center in the city’s Pudong district.

There were similar scenes earlier this year when the central city of Xi’an, home of famous terracotta warriors, was closed to contain the outbreak of COVID-19. While case levels are nowhere near what is being seen in the West and even in other parts of Asia, China’s staunch response has been disruptive, with President Xi Jinping urging officials to stop the spread of COVID-19. Urge to avoid impact on economy while suppressing.

Along with Tesla, the plant operated by Toyota Motor Corp. And Volkswagen AG in Jilin province has been closed there for weeks because of the lockdown. In Shanghai, financial-market traders are sleeping in their offices to avoid building up on a lockdown that could bar them from the trading floor.

–With assistance from Claire Che, Michelle Fay Cortez, Daniela Wei, Fran Wang and Haejin Kim.

© 2022 Bloomberg LP

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