More parts of China battle Covid and threats of lockdown as cases spike again

BEIJING — Just days after China relaxed some Covid controls, virus cases in different parts of the country have put new regions on alert.

The number of cities restricting local movement more than doubled in a week to 11 as of Monday, up from five a week earlier, according to Ting Lu, chief China economist at Nomura.

The latest measures affect regions that account for about 14.9% of China's GDP, up from 10.1% a week earlier, Nomura said.

Mainland China's daily Covid case count, including those without symptoms, has surged from a handful of cases to around 200 or 300 new cases in the last several days. Most are asymptomatic.

Many of the new cases are in the region around Shanghai. The nearby city of Wuxi in Jiangsu province said late Saturday that bars and gyms would need to close temporarily, while restaurants could only offer takeaway.

Last week, a far smaller region called Si county in the neighboring province of Anhui ordered residents to stay in their homes, and leave only at designated times for virus testing.

In June, Beijing and Shanghai tried to resume normal business activity after weeks of restrictions that had kept children out of schools and many restaurants essentially closed. The southeastern metropolis of Shanghai was by far hit the hardest and locked down for April and May.

Last week, mainland China cut the quarantine period for international travelers and close contacts of Covid cases. The country also changed a nationwide travel system that would theoretically make it easier to move within the country.

The daily Covid case count in Beijing and Shanghai has fallen to single digits or zero in the last several days.

"Markets could become a bit too complacent if they ignore the rebound of covid cases and underestimate the costs of persistent covid containment measures," Nomura's Lu said in a report Monday.

In addition to new cases on the mainland in economic powerhouses like Jiangsu province, Lu noted the spread of Covid in nearby economies — evident in Hong Kong's climbing case count and Taiwan's daily average of more than 100 new deaths in the past week.

Mainland China has not reported new deaths from Covid for weeks.

"We have been in the upswing phase of China's 'Covid Business Cycle (CBC)' since late May, thanks to a decline in the number of Covid-19 cases, the lifting of lockdowns and other easing of zero-Covid strategy (ZCS) restrictions, and stimulus measures," he said. "However, another wave of Omicron could prompt a return to a downswing phase, even though the timing of such an occurrence is uncertain."