China opens its doors after zero covid. But the road is long

BEIJING — It’s been about two weeks since mainland China abruptly ended most Covid controls, but the country still has a long way to go back to a normal pre-pandemic state.

In major cities Shanghai and Shenzhen, Friday morning rush hour traffic was very light, according to Baidu data.

Subway rides in major cities through Thursday remained well below normal, according to Wind Information.

“Larger-than-expected waves of COVID are leading to voluntary social distancing, as evidenced by empty streets in Beijing in mid-December,” S&P Global Ratings analysts said in a report on Wednesday.

“While this wave may abate in the coming weeks, a resurgence is likely during the Lunar New Year festival in late January 2023,” the analysts said. It will be the first time in nearly three years that mass immigration has resumed in China as families gather.

in December. On September 7th, the Chinese authorities abolished virus testing requirements and health code checks for domestic travel, among others that have become an increasingly strict policy to prevent the spread of the Covid virus. Meanwhile, local infections are starting to rise, especially in Beijing.

Michael Hart, president of the American Chamber of Commerce in China, said that within a week, more than 60% of the employees of a Beijing-based company tested positive for the Covid virus.

“After two weeks, we’re able to get people back in the office,” he said Friday. “We basically went down really fast. It looks like we’re coming back really fast.”

Traffic in Beijing on Friday morning recovered slightly from a week ago, Baidu data showed, putting the capital back in first place as the busiest nationwide. But figures showed that the level of congestion in Beijing is still about 25% lower than it was last year.

In a survey of nearly 200 members of the American Chamber of Commerce in China from Dec. 3. For 16- to 19-year-olds, more than 60% of respondents said they expected the impact of the latest Covid outbreak to end within one to three months, Hart said.

Respondents underreported major supply chain problems, Hart said, noting that many companies are likely to keep more inventory on hand after disruptions from Shanghai’s lockdown earlier this year.

However, he said, most respondents said at this time that they were unable to predict the long-term impact of the outbreak on their business.

As for foreign direct investment in China, Hart said he expects it will take about a year after travel is fully reopened for such investment to start to recover.

China has not yet changed its quarantine policy for international travelers to the mainland. Arrivals currently need to be quarantined for five days in a central facility, followed by three days at home.

Other data indicated a rebound in domestic travel.

Flight bookings from Beijing from Monday to Wednesday rose 38% from the previous week, while economy fares rose 20%, according to Konar data reported by Chinese media Sina Finance. CNBC could not independently confirm the report.

Chinese travel website Trip.com said that from December 3. From 7 to Dec. On the 18th, bookings for flights to tropical Hainan Province rose 68% from the previous month. Trip.com said hotel bookings in Hainan last week rose 20% from the previous week.

While the city of Beijing appears to be emerging from the wave of Covid, the outbreak has also hit other parts of the country.

In the southern cities of Shenzhen and Guangzhou, there are far fewer people on the streets, said Klaus Zinkel, vice president of the European Chamber of Commerce in China and head of its southern branch. He estimated that road traffic decreased by 40%, indicating an infection rate of about 60%.

Zenkel said Thursday that most companies are following guidelines that tell employees to only stay home if they have a fever or strong Covid symptoms. “this means [the] The work force will be reduced, I just hope that everyone doesn’t get sick at the same time.”

There are few official figures on the increase in infections or deaths from the recent COVID outbreak in China.

China is likely not able to keep up with the surge in infections, World Health Organization emergencies director Mike Ryan told a news briefing on Wednesday.

“In the current situation in China, what is being reported are relatively low numbers of cases in hospital or relatively low numbers of cases in intensive care units, while there are anecdotal reports that these intensive care units are filling up,” Ryan said, according to an official transcript. .

“In a fast-moving wave, you might have been told three days ago that your hospital was OK,” he said. “This morning it may not be so good because the wave has come and all of a sudden you have a very high level of infection.”

Most people self-tested for the virus after most mandatory testing was removed. Last week, the National Health Commission also stopped reporting asymptomatic cases.

“It was the government [holding] Daily press conferences tell you how many people have been infected, and then they don’t go into any information, Hart said on AmCham.

He said the lack of official announcements facilitated the spread of rumors. Hart also said that interactions with government groups indicate their offices are becoming infected and working from home is carrying out at a similar pace to what companies have seen.