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China follows Covid control, Beijing luxury shopping mall closes

The large luxury shopping mall Beijing SKP, pictured here in 2021, said on Friday that it would close – with no date set to reopen – after the city confirmed three Covid cases in the past year. a nearby apartment community.

Qilai Shen | Bloomberg | beautiful pictures

BEIJING – China shows little sign of easing its zero-Covid control policies as it continues to battle its worst outbreak in two years.

Some businesses have resumed production in Shanghai and northern China. However, the capital Beijing temporarily closed on Friday, a large luxury shopping mall and non-essential businesses in an area to control the continued increase in cases. source from the highly infectious omicron variant.

China’s top leaders said at a meeting on Friday that the Covid and Ukraine crises have increased challenges and uncertainties facing the domestic economy, according to state media. President of China Xi Jinping heads the economic meeting, held regularly with China’s leadership, known as the Politburo.

The leaders noted the mutation’s new characteristics and said the country should follow a “dynamic zero-Covid policy”, state media said.

Bruce Pang, head of macro and strategic research at China Renaissance, said Covid policy will not be easy in the near term. He said the meeting reflected headwinds for growth that was stronger than previously expected and noted leaders called for more policy support for China to meet its GDP target of around 5.5%. .

Many investment banks have cut their China GDP forecasts, a low of 3.9%, following new Covid cases and controls.

Mainland China reported more than 5,600 new confirmed Covid cases with symptoms on Thursday, with the majority being previously asymptomatic Shanghai cases.

The southeast metropolis, home to the world’s busiest port, has kept most of the population locked up for more than a month in an attempt to control the outbreak locally. Other parts of the country, including Beijing, have locked down residential areas, conducted mass virus tests and restricted travel in an effort to control a spike in new cases. .

Beijing reported two new asymptomatic Covid cases and 47 symptomatic cases – similar to the daily numbers for much of last week. More than 15 other provincial-level regions have reported new cases, including the high-exporting provinces of Shandong, Guangdong and Zhejiang.

Liang Wannian, head of the National Health Commission’s Covid response expert group, said at a press conference that specific virus control measures could “sacrifice” convenient life for some regions. and people, affecting the economy in the short term for some localities. Friday.

But that will allow the largest area and the number of people to work and live normally, to balance the cost effectively, he said.

Liang on Friday described the virus situation in Shanghai and Beijing as improving significantly. He said a dynamic Covid zero policy does not mean no infections, as variations like omicrons mean authorities cannot guarantee that no cases will emerge.

Shanghai factories speed up

Shanghai tried to allow some large enterprises to resume production by publishing a list about two weeks ago with 666 companies that could be given priority to restart work.

Just over a third, or 247, of the companies are foreign-invested enterprises, the Commerce Department said on Thursday.

German car company Volkswagen and American electric car company Tesla The ministry said it had resumed production activities, noting that other foreign enterprises had submitted applications to join the second batch of whitelisted companies. The ministry said it will make every effort to ensure a resumption of operations.

  • American chemical company DuPont said on Thursday that all of its manufacturing facilities in China are operating under normal or bubble-like conditions. Earlier last week, the company said its production facilities in Shanghai have yet to reopen.
  • German chemical giant BASF said most of its employees in Beijing have been working from home since Monday, and most of its production facilities are in China, including in Shanghai. , remains active despite reduced production volumes.
  • On Monday, German carmaker Volkswagen said it had begun to resume production at its plant on the outskirts of Shanghai, and that its plants in Changchun, northern China, were ramping up production. The company did not respond to a request for an update from CNBC on Thursday.

Changchun city in Jilin province began returning to normal operations on Thursday after weeks of lockdown, according to an official announcement.

Transporting trucks between ports and factories remains a challenge.

Merchants have had to pay more for logistics costs – currently around 25% of the selling price, up from 15% or 20% at the start of the pandemic – Diane Wang, founder and president of the Chinese e-commerce site National DHgate, told CNBC on Thursday. . The company mainly works with small Chinese companies selling overseas.

But with existing inventory, stay-at-home orders and lockdowns would have to last at least three months to really affect business, she said.

The city of Beijing is in a state of alarm

Read more about China from CNBC Pro

State media said gyms, cinemas and other non-essential businesses in the surrounding area would need to close, while the city carried out mass screenings of residents and staff stay there through Tuesday, May 3. The report makes no mention of a stay-at-home order, but discourages people from going out.

Nearby, one metro stop south of the main mall, the local government extended the no-go zone starting Monday through this coming Tuesday, May 3. Authorities also extended the lockdown area a little further south.

The affected areas above are in Beijing’s main business district began three days of mass testing on Monday.

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