A Handful of Cases Sends Shanghai Into Lockdown Again

SHanghai will temporarily lockdown the entire city for testing Covid-19 cases this weekend. This is to cause more disruptions and trigger a new run of grocery stores days after a two-month long shutdown.

The plan emerged from one area with a handful of cases and spread in hours to 14 of the financial hub’s 16 districts. It encompasses almost all of the city’s 25 million residents as health officials use testing to root out any silent transmission of the virus, a key tool in China’s Covid Zero arsenal.

The quick escalation reflects the worry that continues to shroud Shanghai, which implemented one of the world’s strictest lockdowns in late March after a sluggish initial response to its outbreak. This latest action follows an increase in the number of infections found within the community, which rose to six from zero on Wednesday. Residents will be released after taking the tests, but they’ll be back under lockdown if new infections are found in their compounds.

Continue reading: Shanghai’s COVID-19 Lockdown Pushes Residents to the Brink

On Thursday, five additional cases of infection were found in people who had been placed in quarantine. That makes it a total number of eleven in the financial center, according to health officials. China has added 73 new infections to its national total.

The return to lockdowns in Shanghai underscores the difficulties of China’s attempts to eliminate the virus while the rest of the world accepts it as endemic. Pandemic restrictions have caused disruption at many companies, including Sony Group Corp. (and Tesla Inc.), with Tesla Inc. only now resuming production operations in its southern Shanghai factory.

The renewed restrictions aren’t yet having a significant impact on the financial markets.

On Tuesday, June 7, 2022, a policeman protects an area of residential property in Shanghai, China.

RAY YOUNG/ Future Publishing via Getty Images

“Investors are watching but there is not much reaction at the moment given its just flare ups,” said Kevin Li, fund manager at GF Asset Management (Hong Kong) Ltd. “If it expands into more areas that affect people turning to work, then it will lead to some volatility.”

As of 2.20 p.m. local, the benchmark CSI 300 Index had increased 1.2% to pardon earlier losses. For the week, it’s up about 3.3%.

The Red Rose Salon, located in the Xuhui District, is the center of one of the clusters. Services were high in demand following its reopening after the March lockdown. During the briefing on Thursday, three infections were linked to the beauty salon, two of which occurred in Minhang (the district with the most recent cases).

Continue reading: China’s Public Is Divided Over the Zero-COVID Approach

Some staff in the state-owned salon didn’t conduct daily Covid tests, officials said at a Thursday briefing.

Four of the six cases were located in Minhang (a 2.65miild area in south-west Shanghai). Minhang — a mostly residential area — will be sealed on Saturday morning for mass testing, according to a statement. Many other districts are also testing on Saturday, though several didn’t specify the dates or times.

Only two districts with fewer than 2 million residents, Putuo and Chongming, aren’t on the testing list.

On June 7, 2022, health workers will take a sample of a male from the Jing’an area in Shanghai.


China doubles its Zero-COVID commitment

Residents felt the latest move very quickly. Some residents were forced to leave their apartments and there was a rush to grocery stores following the initial lockdown. Many had struggled to find fresh fruit and vegetables during the first few days. If no new infections are discovered, the curbs will lift within a matter of hours. However, for those areas that have been exposed to new transmission chains, isolation could be extended up to two weeks.

Lockdowns will make it difficult for China to achieve its annual growth targets, according to most economists. China risks being stuck in an endless loop of increasing and decreasing restrictions by having no tolerance for new cases.

Still, President Xi Jinping continues to emphasize the country’s adherence to a policy that has delivered one of the lowest Covid death rates in the world. Xi called for Covid Zero to be adhered to “unwaveringly” in a visit to Sichuan province Thursday, according to the official Xinhua news agency, while stating that it should be achieved in balance with the needs of the economy.

Continue reading: The Rising Costs of China’s Zero-COVID Policy

These comments echo sentiments expressed in March, when Xi urged Chinese officials not to allow Covid-fighting policies to have a financial impact on their finances. Shanghai authorities helped manufacturers set up so-called closed-loop system in their factories that allowed them to operate. These systems create a bubble where workers go only to the factory and sometimes live on-site. They are regularly tested for Covid incursions.

The threat of disruptive measures also returned to Beijing on Thursday, with mass testing resumed in several neighborhoods of the capital’s key Chaoyang district, home to company headquarters and embassies. Five days of no community spreading ended with a flareup in Covid at a bar. Beijing has reported 8 new Covid cases on Thursday.

China appears to be actively seeking to provide universal and easy testing to help avoid expensive lockdowns. In major cities, there are special kiosks set up to test residents. The idea is that constant testing — a negative test is required to enter shopping malls and even parks in some places — will find early chains of transmission before they get out of control.

Infections are also spreading in China’s north, with outbreaks in Inner Mongolia and in Dandong, a city on the border with North Korea, which recently acknowledged what it claimed was its first Covid outbreak.

Winnie Zhangu, Helen Sun and Linda Lew provided assistance.

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