BEIJING/SHANGHAI (Reuters) – China’s capital Beijing on Wednesday closed dozens of subway stations and bus routes in its campaign to stop the spread of COVID-19 and avoid the fate of Shanghai where millions of residents are subjected under strict lockdown for more than a month.
New evidence has emerged that China’s uncompromising battle against the coronavirus, which reportedly emerged in a market in the city of Wuhan in late 2019, is undermining its growth and hurting international companies investing there.
Late Tuesday, another city announced work-from-home and other COVID restrictions for the coming week. The central city of Zhengzhou, home to 12.6 million people and a factory of Apple’s iPhone maker Foxconn, joins dozens of major cities in full or partial lockdown.
The capital has closed more than 40 metro stations, around a tenth of the network, and 158 bus lines, service providers said. Most suspended stations and routes are in Chaoyang District, the epicenter of Beijing’s outbreak.
With dozens of new cases a day, Beijing is trying to avoid a full lockdown, as Shanghai also did initially, hoping instead that mass testing will find and isolate the virus before it spreads.
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The city of 22 million has closed schools as well as some businesses and residential buildings in high-risk areas, and many people are stocking up in case a full lockdown occurs.
Twelve of Beijing’s 16 districts were carrying out the second of three rounds of testing this week, after carrying out three mass screenings last week.
In Shanghai, the end of the confinement is not in sight.
After more than a month, most residents of mainland China’s biggest city and its financial hub are still not allowed to leave their homes.
Some of Shanghai’s 25 million residents have enjoyed a temporary easing of precautions since Sunday, with usually only one member of a household allowed out for a brisk walk, some fresh air and a bit of shopping in supermarkets.
According to the latest data, Shanghai found 63 new cases outside the areas with the strictest restrictions, suggesting that the city still has some way to go to reach the goal of no cases for several days before the restrictions. cannot relax significantly.
Authorities say the zero-COVID policy aims to save as many lives as possible, pointing to the millions of COVID deaths outside of China, where many countries are forgoing precautions to “live with COVID” even as the infections spread.
“THE GROWTH MOMENTUM HAS DETERIORATED”
But the policy is hurting domestic consumption and factory production, disrupting key global supply chains and cutting revenues for some of the world’s biggest brands, such as Apple, Gucci’s parent company Kering, and Yum. China, owner of Taco Bell.
Capital Economics estimates that COVID has spread to areas generating 40% of China’s output and 80% of its exports – all facing varying degrees of restrictions.
“Recent mobility trends suggest that China’s growth momentum deteriorated significantly in April, with traffic congestion, subway passenger volume and other high-frequency indicators at their lowest levels since the initial outbreak,” Fitch Ratings said in a note.
Its analysts cut their growth forecast for 2022 to 4.3% from 4.8%, well below China’s official target of 5.5%.
Starbucks Corp suspended its guidance for the remainder of its fiscal year on Tuesday, primarily due to COVID restrictions in China. Sales in China, where the chain has grown rapidly in recent years, fell 23%, eclipsing the 12% growth in North America.
Foxconn said Wednesday it was continuing production in Zhengzhou.
Many factories were closed after Shanghai’s lockdown from March. As some have started to reopen, it has proven difficult to bring workers back, while dealing with blocked supply chains.
Shanghai authorities helped Tesla transport more than 6,000 workers and carry out disinfection work to reopen its factory last month, according to a letter Tesla sent to officials and seen by Reuters.
International trade is also facing disruption.
A study by analysts at the Royal Bank of Canada found that a fifth of the world’s container ship fleet was stuck in congestion at various major ports.
At the port of Shanghai, 344 ships were waiting to be docked, an increase of 34 percent from last month. Shipping something from one warehouse in China to another in the United States takes 74 days longer than usual, they said. (This story has been reclassified to remove the superfluous “in” in the title)
(Reporting on Aizhu Chen, Hou Xiangming, Brenda Goh and the Beijing and Shanghai offices; Writing by Marius Zaharia; Editing by Robert Birsel)
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