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Shanghai targets COVID lockdown exit in June as Chinese economy slumps

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SHANGHAI/BEJING — Shanghai on Monday unveiled plans for ending a painful COVID-19 lockdown that has lasted more than six weeks and severely hurting China’s economy and for returning to more normal life from June 1.

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In the clearest timetable yet, Deputy Mayor Zong Ming said Shanghai will gradually reopen, with movement restrictions largely in place until May 21.

“From June 1 to mid and late June, as long as the risk of infection resurgence is under control, we will fully implement epidemic prevention and control, normalize management, and fully restore normal production and life in the city” , she said.

However, the announcement drew skepticism from some Shanghai residents, who have been repeatedly disappointed by the postponement of the timetables for lifting restrictions.

“Shanghai, Shanghai… do you want me to believe you?” a member of the public said on social media platform Weibo.

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The full lockdown of Shanghai and COVID restrictions on hundreds of millions of consumers and workers in dozens of Chinese cities have caused economic pain across a range of sectors and fueled fears the economy could contract in the second quarter.

The restrictions, increasingly at odds with the rest of the world, which has lifted COVID rules despite the spread of infections, are also sending shockwaves through global supply chains and international trade.

Data on Monday showed that China’s industrial production and retail sales fell at the fastest pace in more than two years in April, missing expectations.

The latest data has been dismal, with catering sales down 22.7%, home sales by value plummeting 46.6% and auto sales plummeting 47.6%.

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In Shanghai, China’s most populous city with 25 million people, no cars were sold last month, data showed, as dealerships were closed. China Eastern Airlines, which is based in the city, said passenger numbers fell 90.7% in April from a year earlier.

According to analysts, Chinese economic activity is likely to have improved somewhat in May and the government and central bank are expected to implement further stimulus measures to speed things up.

However, given China’s uncompromising “zero-COVID” policy, the strength and durability of any recovery are uncertain.

“The data paints a picture of a faltering economy in need of more aggressive stimulus and rapid easing of COVID restrictions, both of which are unlikely to come anytime soon,” said Mitul Kotecha, an analyst at TD Securities.

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The data overshadowed Shanghai reopening plans and pushed Chinese stocks lower.

In Beijing, the detection of dozens of new COVID cases a day over the past three weeks shows how difficult it is to clean up even small outbreaks.

The capital has not imposed a city-wide shutdown, but has tightened curbs enough that road traffic levels have been similar to those in lockdown Shanghai over the past week, according to data tracked by Chinese internet giant Baidu.

Meal services are banned, public transport restricted and many residents have been advised to work from home.

A woman surnamed Zhang, who runs a shop selling jianbing pancakes, a popular street food, in front of one of Beijing’s closed subway stations, said her daily sales are from 2,000 to 3,000 yuan ($570) at just still down 100-200 yuan (US$38).

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“Don’t we have to pay the rent as usual? You see a lot of small businesses have closed,” she told Reuters on Monday from her empty, dimly lit shop.

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“PLEASE DON’T LIE”

In Shanghai, the deputy mayor said the city will start reopening supermarkets, convenience stores and pharmacies from Monday, but restrictions on movement must remain in place until at least May 21.

Starting Monday, operators will gradually restore train services and domestic flights, she said. Bus service will gradually resume from May 22, but people must present a negative COVID test within 48 hours to use public transport.

During Shanghai’s lockdown, authorities have repeatedly dashed hopes of an end to the ordeal. The lockdown was originally only supposed to last until April 5 when it was introduced on March 27.

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Last week many condominiums received notices that they would be in “silent mode” for three days, which usually means they cannot leave the house and in some cases no deliveries will be made. Another message then said that the period of silence would be extended to May 20th.

“Please don’t lie to us this time,” said another Weibo user, adding a crying emoji.

Shanghai reported fewer than 1,000 new cases as of May 15, all indoors under tight controls.

No new cases were found for the second straight day in relatively clearer areas monitored to gauge progress in eradicating the outbreak.

A third day would normally mean that “zero COVID” status has been reached and restrictions can be gradually eased. Fifteen of the city’s 16 counties had achieved “zero COVID”.

Beijing on Monday reported 54 cases for the previous day, up from 41 the day before.

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