The coronavirus pandemic is approaching the halls of power in Beijing as authorities rush to avoid an uncontrolled outbreak of the Shanghai-style Omicron in the Chinese capital.
Beijing has tightened restrictions on the coronavirus after reporting 41 cases on Sunday. Officials in the 22-million-strong city, also home to top leaders of China’s ruling Communist Party, have closed gyms and cinemas and raised Covid-19 testing requirements in a bid to avoid a situation in Shanghai where tens of millions were limited to apartments.
The new wave of social and health controls in Beijing marks the latest sign that China’s leadership remains committed to the tough implementation of President Xi Jinping’s policy of zero Covid. This is despite indications that the policy is causing widespread economic damage inside and outside China and provoking internal opposition to the government’s response to the pandemic.
Authorities in Beijing ordered three rounds of nationwide PCR tests last week after a group of cases was discovered in the Chaoyang business district. The daily number of cases in the capital has remained in double digits over the past seven days.
Residents returning to schools and offices on the Thursday after the three-day holiday this week will be required to present a negative Covid test within 48 hours. Indoor eating was banned during the holiday in another attempt to delay the epidemic.
The tightening of control in Beijing followed small-scale protests that erupted in Shanghai amid food shortages, as well as online complaints about Xi’s policies.
After weeks of blockades in some regions severely affected by the initial wave of Omicron, including Shanghai, Jilin and Zhejiang, the official number of cases is declining.
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But even as urban life showed signs of resurgence, vital logistics routes that connect buyers and suppliers remain choked. Chinese authorities have also restricted traffic between cities to prevent the importation of infections, leaving factories without important components for production.
Official economic data released on Saturday show production and service activity at their lowest levels since the pandemic erupted in Wuhan, central China, in early 2020.
China’s non-productive purchasing managers index, composed of the services and construction sectors, fell to 41.9 in April, deteriorating from 48.4 the previous month and well below the 50-point threshold, which shows expansion rather than contraction.
Production PMI, an important indicator of factory performance in the world’s most important growth engine, fell to 47.4 from 49.5 in March, according to the National Bureau of Statistics.
The data underscores how weak consumer sentiment and huge supply disruptions are hitting the world’s second-largest economy.
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Growing pressure is already undermining confidence in Beijing’s ambitions to grow 5.5 percent this year – its lowest target in 30 years – as well as forcing China to take a series of stimulus measures and weaken the yuan.
Economists have warned that the economic shock of recent blockades could be worse than the aftermath of Wuhan’s eruption two years ago. This is because many high-tech and automotive manufacturers are located near Shanghai, which faces restrictions of several weeks during a normally busy period for factories in the country.
Wang Zhe, a senior economist at Caixin Insight Group, also noted the growing stress in China’s labor market and inflation, which exacerbates problems for economic planners in Beijing.
“Some companies said demand was low due to Covid outbreaks, and some said the main problem was the difficulty of getting workers back to work,” Wang said. “Employment has fallen in eight of the last nine months, including April.”
Additional reports by Andy Lin in Hong Kong
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