Shanghai allows 4 million people to leave their homes as virus rules ease

Shanghai allowed 4 million more people out of their homes Wednesday as anti-virus controls that shut down China’s biggest city eased, while the International Monetary Fund cut its forecast of Chinese economic growth and warned the global flow of industrial goods might be disrupted.

A total of almost 12 million people in the city of 25 million are allowed to go outdoors following the first round of easing last week, health official Wu Ganyu said at a news conference. Wu stated that the virus was now under effective control in certain areas of the city.

Under the latest changes, more than 4 million people are included in areas where the status shifted from closed to controlled, said Wu. Wu stated that some residents are not allowed out of their homes and that large gatherings are forbidden.

Meanwhile, the IMF reduced its forecast of Chinese growth this year to 4.4% from 4.8% due to the shutdowns of Shanghai and other industrial centers. This is almost half of the 8.1% growth last year and below the 5.5% target set by the ruling Communist Party.

China’s case numbers in its latest infection surge are relatively low, but the ruling party is enforcing a “zero-COVID” strategy that has shut down major cities to isolate every case.

On Wednesday, the government reported 19,927 new cases in China’s mainland, all but 2,761 of which had no symptoms. Shanghai accounted for 95% of the total, or 18,902 cases, of which 2,495 had symptoms.

The Shanghai city health agency reported seven people who had COVID-19 died Tuesday but said the deaths were due to cancer, heart disease and other ailments. All but two were over 60.

Shanghai shut down businesses and confined most of its population to their homes starting March 28 after a spike in infections. There were complaints about lack of food and medicine supplies. People who have tested positive in Shanghai but do not have symptoms have been placed in quarantine centers in public buildings and exhibition halls.

Official data this week showed economic growth in the first three months of this year declined compared with the final quarter of 2021.

The lockdowns in China “will likely compound supply disruptions elsewhere” and might add to pressure for inflation to rise, the IMF said in a report.

The ruling party has promised tax refunds and other aid to businesses but is avoiding large-scale stimulus spending. Economists believe that this strategy will take longer to produce results and Beijing may need to spend more money or reduce interest rates.

Chinese leaders have promised to try to reduce the human and economic cost of anti-disease controls by shifting to a “dynamic clearing” strategy that isolates neighborhoods and other smaller areas instead of whole cities. Many areas are now enforcing stricter controls, despite Shanghai officials being criticized for not being aggressive enough.

Also Wednesday, the Ministry of Agriculture ordered local officials to avoid any measures that might interfere with spring planting by farmers who feed China’s 1.4 billion people. This order came after warnings that the production of wheat and other crops could be disrupted. This would increase demand and drive up already high global prices.

The government reported 26,760 people who tested positive but had no symptoms were released Wednesday from observation. That included 25,411 in Shanghai, where some residents of quarantine centers have complained they are unsanitary.

Other industrial and trading centers including Changchun, Jilin and Shenyang in the northeast, the port of Tianjin east of Beijing and Shenzhen and Guangzhou in the south have closed businesses, imposed travel restrictions or told told residents to stay home.

Global automakers and other manufacturers reduced or stopped production because suppliers couldn’t deliver.

This week, Volkswagen AG announced its Changchun factory resumed production and the automaker was considering when its Shanghai facility would reopen. BMW AG announced that its Shenyang factory has reopened.

While some cities were easing controls, the the government of Harbin, a city of 5.3 million in the northeast, suspended bus and subway service on Wednesday and barred the public from moving between districts.