Shanghai locks down half the city to nail growing Covid outbreak

[SHANGHAI] China's financial hub of Shanghai has launched a two-stage lockdown of its 26 million residents, closing bridges and tunnels and restricting highway traffic in a scramble to contain surging COVID-19 cases.

At 5.00 am on Monday (Mar 28), the city of 25 million people locked down areas east of the Huangpu River, which includes its financial district and industrial parks, for 4 days. The lockdown then shifts to the other half of the city, in the west, for another 4 days, said a statement Sunday from the local government.

Residents are barred from leaving their homes, while public transport and car-hailing services have been suspended. Private cars have been barred from the roads unless necessary. Production at Tesla's Shanghai factory has been suspended because of the curbs, people familiar with the move told Bloomberg News.

The sweeping restrictions come as China experiences its worst Covid spread since the virus's emergence in Wuhan, with 5,550 locally-acquired cases reported nationwide on Saturday. The outbreak is testing the country's virus strategy, which is proving tougher to prosecute amid more contagious variants and is dragging on the world's second-largest economy as the rest of the globe normalizes. Crude oil fell early Monday on concern lockdowns and other curbs could impact demand in the giant market.

The Shanghai move comes after authorities locked down the tech hub of Shenzhen in the south earlier this month, the most economically strategic city to come under such restrictions since the pandemic started. More than 3,200 kilometres to the north, Jilin, which borders Russia, saw its capital city shuttered on Mar 11 and days later the entire province sealed off. The region, a hub for auto-making, remains locked down.

Infections in Shanghai, home to the Chinese headquarters of many international companies and the country's largest port, have climbed in recent days despite repeated and expanded testing, a key tool in China's resource-intensive Covid Zero arsenal. The financial hub reported 2,676 new infections Saturday, up 18 per cent from a day earlier, overtaking Jilin as the nation's biggest Covid hot spot.

Exchange, port

The Shanghai Stock Exchange will shift many services online, and extended the time window for listed companies to release statements to 11.00 pm local time. Firms will also be able to apply to postpone the publication of their full-year earnings. Shanghai's port, the world's biggest, will maintain operations during the lockdown, the Securities Times reported.

The lockdowns in Shenzhen and now Shanghai, 2 of China's most economically significant cities, show the growing toll - and challenge - of maintaining a zero-tolerance approach to the virus amid more transmissible variants. While most countries have started to live alongside Covid, accepting it as endemic, China is maintaining its strategy of closed borders, mandatory quarantines and mass testing, even as it becomes more difficult by the day.

China's economy faces its worst downward pressure since the spring of 2020, during Covid's first wave, Nomura Holdings economists wrote over the weekend.

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

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

In its statement released Sunday night, Shanghai's government said it will ensure basic supplies such as electricity, fuel as well as food during the lockdown periods.

Still, the surprise announcement immediately sparked a rush for groceries as residents sought to stock up on necessities ahead of the first lockdown, which is scheduled to start at 5.00 am local time on Monday.

Over the past week, many Shanghai residents have been hoarding supplies due to uncertainty over building lockdowns - the city's strategy until now - and a lack of delivery drivers. Shanghai police detained 2 men last week on suspicion of spreading rumours that the entire city was headed into a total lockdown.

Officials stressed that citizens' emergency medical needs will be guaranteed during the lockdown.

A nurse died of asthma Wednesday night after being turned away from Shanghai East Hospital as the emergency department was closed for disinfection under Covid control rules. She subsequently died at another hospital, according to a statement from the medical centre in the city's Pudong district.

There were similar scenes earlier this year when the central city of Xi'an, home to the famed terracotta warriors, was locked down to tame a Covid outbreak. While case levels are nowhere near what is being seen in the West and even in other parts of Asia, China's hardcore response has become disruptive, spurring President Xi Jinping to urge officials to avoid impact to the economy while continuing to suppress Covid.

Along with Tesla, plants run by Toyota Motor and Volkswagen in Jilin province have been shut down for weeks due to the lockdown there. In Shanghai, financial-market traders have been sleeping at their offices to avoid building lockdowns that would prevent them from the trading floor. BLOOMBERG