Shanghai imposes lockdown as officials struggle to contain Covid outbreak

Shanghai pushed ahead with a stringent lockdown on Monday that will divide China’s biggest city into two zones, as authorities struggled to stem record coronavirus cases in the country’s most important financial centre.

The government will shut down public transport this week as it conducts mass testing across Pudong, the city’s financial district, located east of the Huangpu river. Similar restrictions will apply from April 1 to the district of Puxi, west of the river.

The measures, which marked the first time authorities in Shanghai have imposed a lockdown that confined residents to their homes, sparked panic-buying across the city as shoppers rushed to stock up on vegetables.

The outbreak in mainland China’s most international financial centre is proving a big test for the country’s wider strategy to contain coronavirus. Authorities have instituted severe restrictions on other cities to eliminate outbreaks, although recently there had been signs that the approach was being tempered.

President Xi Jinping this month emphasised the need to “minimise the impact” of the virus on the country’s economy after southern tech hub Shenzhen was locked down. In Shanghai, authorities had indicated that a full-scale lockdown was not necessary a few weeks ago, although buildings with positive cases were often sealed off.

Some factories in China have set up isolated “bubble” systems, an approach comparable to the closed system employed for the Winter Olympics in February, which allowed staff to work during lockdowns as long as they did not leave the premises.

Shanghai, with a population of 26mn, recorded just 50 symptomatic cases on Sunday, according to official data, but notched a record 3,450 asymptomatic cases, compared with 5,134 asymptomatic cases across the rest of mainland China.

Over the weekend, the Shanghai World Expo and Exhibition Centre, a vast building in the Pudong district that hosted the Shanghai World Expo in 2010, was opened as a quarantine centre for mild and asymptomatic cases.

The city’s response to the outbreak contrasts with that taken in Hong Kong, which has recorded more than 1mn cases over the past two months after being largely free of infections for almost two years. Plans for mass testing in the territory, which also sparked panic buying, have been downplayed recently given the sheer scale of infections.

China’s stock market started the week lower following news of the lockdowns in Shanghai, with the country’s benchmark CSI 300 index falling as much as 2 per cent on Monday morning as traders weighed the implications for the country’s broader strategy.

“In the near term, China will stick to its zero-tolerance approach,” said Bruce Pang, head of research at China Renaissance. He added that while supply chain shocks had been minimal, the outbreaks would probably weigh on economic growth as Chinese consumers grappled with greater uncertainty.

Pang said that official statements, including from the latest meeting of the Chinese Communist party’s politburo, “imply any adjustment [to containment strategies] will come with the precondition of eliminating infection”. 

Additional reporting by Wang Xueqiao in Shanghai