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China tries to shake off the worst of the pandemic in a long, zero-Covid journey


A handful of tourists visit the normally packed Yuyuan Garden during the Dragon Boat Festival holiday on June 4, 2022, in Shanghai, where authorities are allowing a return to normal life and business activity.

Vcg | Visual China Group | Getty Images

BEIJING — China is starting to show signs of recovery from the latest Covid shock.

In a significant step toward normality, the capital city of Beijing allowed restaurants in most districts to resume in-store dining on Monday — after a hiatus of about a month. Most other businesses could also restore in-person operations.

The southeastern metropolis of Shanghai, which was locked down for about two months, pressed on with a reopening plan that kicked off last week. Residents flocked to camping sites and local parks over the long weekend holiday that began Friday, according to travel booking site Trip.com.

As people returned to work on Monday, a traffic congestion tracker from Baidu showed heavy traffic in Beijing and Shanghai during the morning commute — versus light traffic a week earlier. Both cities also relaxed the frequency of virus tests to three days from two.

After a surge of omicron cases across the country since March, the nationwide daily Covid case count has fallen to well below 50, according to official data.

The unsynchronized lockdowns and reopenings across major cities suggest that China’s ongoing post-lockdown growth recovery should be less steep than the V-shaped one in spring 2020.

Under China’s “dynamic zero-Covid policy” mandate, local authorities have used strict travel bans and stay-home orders to control the virus. Those restrictions disrupted supply chains and other business, sending retail sales and industrial production falling in April.

“Our high-frequency trackers suggest that barring another severe Covid resurgence and related lockdowns, mobility, construction and ports operation could recover to pre-lockdown levels in around one month,” Goldman Sachs China Economist Lisheng Wang and a team said in a report Saturday.

However, businesses in the service sector that involve close human contact would find it challenging to “achieve a full recovery any time soon,” the report said. “The unsynchronized lockdowns and reopenings across major cities suggest that China’s ongoing post-lockdown growth recovery should be less steep than the V-shaped one in spring 2020.”

Goldman’s analysts pointed to the absence of growth drivers such as exports and real estate, and greater economic costs for controlling a Covid variant more transmissible than the one in 2020.

Real estate accounts for more than a quarter of China’s GDP, according to Moody’s.

During a press conference last week, People’s Bank of China Deputy Governor Pan Gongsheng gave little sign of additional large-scale support for the sector. He noted how the pandemic restricted real estate construction and sales. But he emphasized Beijing’s policy of limiting speculation in the sector, and described authorities’ latest moves to relax some curbs on real estate loans.

Sluggish recovery



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