China is rushing to control new Covid cases across the country

Workers in Shanghai’s Changning district put up a fence on October 7, 2022, around a neighborhood lockdown following reports of new Covid cases.

Hector Retamal | Afp | Getty Images

BEIJING — New cases of Covid are on the rise in mainland China, prompting many local authorities to tighten travel controls.

About 4.8% of China’s gross domestic product has been negatively affected by Covid controls since Monday, according to a model from Nomura. That’s up from 4.3% a week ago.

Three of Shanghai’s central districts on Monday ordered entertainment venues such as Internet cafes to be temporarily closed, according to official announcements.

On Tuesday, several schools in the central Chinese city of Xi’an canceled in-person classes for most students, according to a local news outlet. A hashtag about the sudden closures was one of the top trends on Weibo, China’s Twitter-like social media platform.

Xi’an’s education department did not immediately respond to CNBC’s request for comment.

The measures follow a week-long National Day holiday that ended on Friday, during which “China’s overall Covid situation appears to have materially worsened,” Nomura’s chief China economist Ting said in a note on Monday. Lou and a team.

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The report highlighted the Oct. 4 lockdown in a popular tourist city in southern Yunnan province, Xinjiang’s ban on people leaving the region due to a local Covid outbreak, and a Oct. 6 lockdown in Hainan province’s Haikou city.

The seven-day moving average of locally transmitted Covid infections with symptoms more than doubled from 136 on Oct. 1 to 305 on Oct. 9, Nomura analysts said.

Mainland China reported 427 new symptomatic Covid cases for Monday in more than 20 province-level regions of the country. When asymptomatic infections were added, the daily number of cases exceeded 2,000 and came from almost all 31 districts at the province level.

Domestic tourism receipts during the holiday this month – China’s last public holiday of the year – reached 287.21 billion yuan ($40.45 billion), according to China’s Ministry of Culture and Tourism. This was lower than last year and remained well below 2019 levels, the ministry said.

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But online booking platform Trip.com said nearly two-thirds of holiday bookings were for nearby travel or accommodation, for which spending was up 30% year-on-year.

Strict virus testing requirements and the risk of not being able to return home have discouraged long-haul domestic travel to the mainland.

That contrasts with a surge in overseas travel as Hong Kong, Taiwan, Japan and South Korea have joined other countries in relaxing quarantine rules and virus testing.

Zero-Covid obsession

This October is a particularly politically sensitive time for China, as President Xi Jinping is expected to consolidate his power at a key meeting of China’s ruling Communist Party next week.

Ahead of this conference, central government officials reaffirmed their strong zero-Covid policy in an article on Monday in the party’s newspaper, the People’s Daily.

State broadcaster CCTV summarized the article on its nightly newscast, stressing the need for an even more targeted approach to controlling Covid.

“We must remain vigilant against the spread of the pandemic, overcome the paralyzed thinking, war fatigue, risk-taking mentality and take it easy — and conscientiously do the work of pandemic prevention and control,” said the TV station, according to a CNBC translation in Chinese.

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