COVID-hit Shanghai heads for lockdown exit but China still lost in economic


  • Shanghai set to lift COVID-19 lockdown on June 1
  • Government officials express concern about broader economy
  • Analysts expect more aggressive economic support soon

BEIJING, May 26 (Reuters) – Pandemic-hit Shanghai, China’s financial hub, unveiled more post-lockdown plans on Thursday as it moves towards a return to normalcy, but a nationwide economic recovery is still a distance away, heightening a sense of urgency for more support.

China’s biggest city by economic output has suffered from the lockdown imposed in early April. Other cities not under lockdown but still hemmed in by COVID curbs, including Beijing, have also struggled, with the highly transmissible Omicron provoking stronger responses from health authorities this year.

With the government refusing to loosen its zero tolerance stance on COVID, factories and businesses have been bruised by disruptions caused by lockdowns, endless mass testing and mobility restrictions on vast swathes of the population.

Register now for FREE unlimited access to Reuters.com

Shanghai is set to finally emerge from its lockdown on June 1 after new infections fell sharply. The mega-city of 25 million people has been cautiously allowing more of its population to venture out and putting more vehicles back onto its once busy streets and boulevards.

City officials said on Thursday that students in junior and senior high school could return to offline classes from June 6, following word earlier in the week that shopping malls and department stores would be allowed to reopen, although in batches, from June 1.

ECONOMIC WOES

As the focus turns to recovery, Premier Li Keqiang on Wednesday offered a grim view of the world’s second-biggest economy, saying the difficulties it faces in some aspects were even greater than in 2020, when China was first hit by the COVID-19 outbreak.

Many private-sector economists expect gross domestic product to contract in April-June from a year earlier versus the first quarter’s 4.8% growth.

China will strive to achieve “reasonable” GDP growth in the second quarter, Li told thousands of government officials across the country in an online conference.

“The unusual meeting caps an increasingly urgent series of official pronouncements in recent days attempting to resolve the economic disruption caused by the wave of COVID-19 lockdowns,” research group Gavekal Dragonomics wrote in a note on Thursday.

“The urgent high-level focus on stabilising growth opens the door for more aggressive stimulus measures to be deployed in coming weeks.”

Underlining the tension between economic and COVID policies and the sensitivity surrounding their discussion, social media sharing of state television reports on Li’s teleconference was intermittently blocked on China’s heavily policed internet.

Some online groups on China’s popular WeChat mobile app also forbade the sharing of unverified transcripts – audio or written – from the conference as well as discussion about the event, fearing…



Read More: COVID-hit Shanghai heads for lockdown exit but China still lost in economic