China's Guangzhou tightens COVID curbs as infections hit big southern cities

[August 31, 2022]  BEIJING (Reuters) -China's Guangzhou on Wednesday imposed COVID-19 curbs in parts of the city, joining Shenzhen in battling local flare-ups, deepening uncertainty over commerce and daily life in two of southern China's most economically vibrant metropolises.

Several of China's biggest cities have stepped up their COVID-19 restrictions this week, affecting the activities of tens of millions of people. Mindful of balancing economic needs with efforts to contain each and every outbreak, authorities said the curbs would last for just a few days, although some smaller cities extended restrictions earlier this month.

China's so-called "dynamic COVID zero" policy makes it an outlier as other countries gradually emerge from coronavirus restrictions, despite the cost to the world's second-largest economy that already faced slower growth.

Guangzhou, a city of nearly 19 million residents near Hong Kong, reported just five locally transmitted infections for Tuesday but authorities ordered certain areas in one district to close indoor entertainment venues and dining at restaurants until Saturday.
 

The city also ordered all kindergartens and primary, middle and high schools in the district to delay resuming fall semesters and halt offline sessions that have already started, according to state media reports on Wednesday.

Bus and subway services in the district were also reduced.

In Shenzhen, at least four districts with around 9 million residents in total, have already ordered closure of entertainment and cultural businesses and halted or reduced restaurant dining for a few days.

The combined economic output of Shenzhen and Guangzhou reached 5.89 trillion yuan ($855 billion) last year, equal to about half of South Korea's gross domestic product (GDP).

Workers set up barricades outside an entrance to the Wanxia urban village as part of coronavirus disease (COVID-19) control measures in Shenzhen, Guangdong province, China August 29, 2022. REUTERS/David Kirton/File Photo

ECONOMY DISRUPTED

According to Capital Economics, 41 cities, responsible for 32% of China's GDP, are currently in the midst of outbreaks - the highest number since April.

"For now, the resulting disruption appears modest, but the threat of damaging lockdowns is growing," said Julian Evans-Pritchard, senior China economist at Capital Economics.

"And even if they are avoided, we expect growth to remain subdued going forward."

China reported 1,675 new domestically transmitted COVID-19 infections for Aug. 30, the National Health Commission said on Wednesday, compared with 1,717 new local cases a day earlier.

Most cases were found in the region of Tibet and the province of Sichuan.

The commercial hub of Shanghai would tighten control over large gatherings and avoid unnecessary ones, a municipality official said, as the city reported two new local infections on Tuesday, including one found in the community.

Large conferences and events involving travel across cities and regions must be downsized, delayed or moved online whenever possible, Wu Qianyu, a Shanghai health official, told a news briefing.

($1 = 6.8920 Chinese yuan renminbi)

(Reporting by Roxanne Liu and Ryan Woo; Editing by Raju Gopalakrishnan and Richard Pullin)

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