China has been put on high alert as Covid-19 cases creep in just days before he begins his third term as Communist Party leader Xi Jinping.
As of Sunday, China reported more than 1,700 cases in the past 24 hours, more than triple the number from the previous week. The growth in infections follows a week-long national holiday as travelers with Covid outbreaks returned from tourist attractions.
“During the National Day Golden Week holiday, China’s overall Covid situation obviously worsened,” Ting Lu, China’s chief economist at Nomura, wrote in a note.
Case growth is fueled by BF. 7, an offshoot of the Omicron subvariant BA.5. The US Centers for Disease Control and Prevention has warned that BF. 7 “appears to be more contagious” than previous Omicron strains and predicted it would cause a spike in infections this winter.
As Beijing prepares to host the Communist Party Congress, the capital has tightened inter-provincial travel to prevent residents from returning from vacations.
Zhang Ke is one of the many Beijingers unable to return home because their health code lists them as on the verge of a Covid outbreak. Many others have complained on social media about being locked out of the city despite not having traveled to a high-risk area.
The 27-year-old hospitality worker returned to Zhangjiakou, Hebei Province, to spend the holiday with her family. She had only been home a day before her family’s compound was sealed off.
“I never left the neighborhood after coming home from the bullet train,” she said.
Zhangjiakou has not declared a citywide lockdown, but Zhang said, “95 percent of the condominiums are closed. Shopping centers and supermarkets are closed. Nobody is on the street.”
Some analysts have been optimistic that Xi would use the Congress, which begins next Sunday, to ease his controversial zero-Covid policy, which has stifled growth and created a cascade of social and political troubles.
But Ting noted that the firing of local officials in Hohhot, the capital of Inner Mongolia, for failing to contain an outbreak confirmed the policy “remains fully intact.”
China’s adherence to zero-Covid has stymied growth, prompting economists to revise downward their gross domestic growth forecasts for the world’s second-largest economy.
The World Bank forecast that China’s economy will grow by 2.8 percent this year and that its economic output will lag behind the rest of Asia for the first time since 1990. In April, the bank had forecast growth of between 4 and 5 percent.
Chinese economic data shows the ongoing economic damage being caused by the implementation of lockdowns. In September, when Chengdu in Sichuan and Dalian in Liaoning were under lockdown, service activities fell for the first time in four months.
On Saturday, the Caixin Services PMI fell to 49.3 in September from 55 in August. Any reading below 50 indicates a contraction in activity.
The impending lockdowns have also dampened consumption. The Golden Week holidays are typically a time of peak domestic tourism and consumer spending, when far-flung corners of the country welcome visitors who bolster local economies.
But this year, battered consumer sentiment and widespread fears of being caught up in lockdowns far from home have severely curtailed travel.
The daily number of passengers traveling through China during this year’s festival week was about 60 percent down from 2019. Tourism revenue fell by more than 55 percent over the same period.
https://www.ft.com/content/d9c2b333-0ce1-4444-9f21-54bb48193191 China is on high alert as Covid cases surge ahead of Communist Party Congress