Guangzhou’s Covid-19 outbreak deepens as more lockdowns loom in China

Guangzhou, capital of Guangdong province, reported 2,377 new local cases for Nov 7, up from 1,971 the previous day. PHOTO: BLOOMBERG

BEIJING – Covid-19 cases escalated sharply in Guangzhou and other major Chinese cities, official data showed on Tuesday, with the global manufacturing hub fighting its worst flare-up ever and testing its ability to avoid a Shanghai-style citywide lockdown.

New locally transmitted infections climbed to 7,475 nationwide on Monday, according to China’s health authority, up from 5,496 the day before and the highest since May 1.

The increase was modest by global standards but significant for China, where outbreaks are quickly tackled when they surface.

Economically vital cities, including the capital Beijing, have jumped on the rising infections, demanding more reverse transcription polymerase chain reaction (PCR) tests for residents and locking down neighbourhoods, and even districts in some cases.

The sharp rebound will test China’s ability to keep its Covid-19 measures surgical and targeted, and challenge the expectations of investors that the world’s second-largest economy could soon reopen its borders or even back off from its zero-tolerance approach.

“We are seeing a game between rising voices for loosening controls and rapid spreading of Covid-19 cases,” said Hwabao Trust economist Nie Wen.

Considering how the nationwide Covid-19 curbs are crushing domestic consumption, he said he had downgraded his fourth-quarter economic growth forecast to around 3.5 per cent, from 4 per cent to 4.5 per cent. The economy grew 3.9 per cent from July to September.

The rising case load dragged on China’s stock markets on Tuesday, but shares have not yet surrendered last week’s big gains.

Investors see China’s beaten-down markets as an attractive prospect as a global slowdown looms, and have focused on small clues of gradual change – such as more targeted lockdowns and progress on vaccination rates.

Mr Damien Boey, chief macro strategist at Australian investment bank Barrenjoey, said: “No matter how harsh the letter of the law is... there is a little bit more loosening.”

Guangzhou, the capital of Guangdong province, reported 2,377 new local cases for Monday, up from 1,971 the previous day. It was a dramatic jump from just double-digit increases two weeks ago, as the sprawling southern Chinese city, dubbed the “factory floor of the world”, battles its most serious outbreak ever.

Many of its districts, including Haizhu at the heart of the city, have imposed varying levels of curbs and lockdowns. But so far, Guangzhou has resisted a blanket lockdown like the one in Shanghai earlier in 2022. Shanghai, currently not facing a Covid-19 resurgence, went into a lockdown in April and May after reporting several thousands of new infections daily in the last week of March.

Mr Aaron Xu, who runs a company in Guangzhou, said: “We have been working from home for the past couple of days. Only a few compounds have been locked up so far. Mostly, we are seeing disruptions in the form of public transit services being suspended and compound security barring couriers and food delivery. And we have to do PCR tests every day.”

Zhengzhou, the capital of central Henan province and a major production base for Apple supplier Foxconn, reported 733 new local cases for Monday, more than double from a day earlier.

In Beijing, the authorities detected 64 new local infections, a small uptick relative to Guangzhou and Zhengzhou, but enough to spark a new burst of tests for many of its residents and a lockdown of more buildings and neighbourhoods where cases were found.

Nomura wrote in a note on Monday: “The lockdown situation has continued to deteriorate quickly across the country over the past week, with our in-house China Covid-19 lockdown index rising to 12.2 per cent of China’s total gross domestic product from 9.5 per cent last Monday.

“We continue to believe that, while Beijing may fine-tune some of its Covid-19 measures in coming weeks, those fine-tuning measures could be more than offset by local officials’ tightening of the zero-Covid-19 strategy.”

In the south-west metropolis of Chongqing, the city reported 281 new local cases, more than double the 120 a day earlier.

Chongqing officials have put new curbs on areas in at least four districts, closing some karaoke lounges, dance halls and entertainment venues, in a situation that a local official described as “complex and severe”. REUTERS

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