China suddenly loosened its pandemic policy in November. This caused a massive wave of infections. Optimism about reopening is fading. Analysts believe that China still has a long way to go before returning to its normal state before the COVID-19 pandemic.
According to Baidu data, traffic density and congestion during rush hour in major cities such as Shanghai and Shenzhen have decreased sharply. On December 23, the congestion level in Beijing fell by 25% compared to 2021.
Recently, the number of people riding the subway has plummeted in cities including Shanghai, Guangzhou, Shenzhen, Xi’an, and Nanjing as infections surged. In Beijing, subway usage was down 80% compared to 2019.
S&P Global Ratings said that Beijing’s empty streets in mid-December suggest that the COVID wave was significantly larger than expected, leading to voluntary social distancing.
According to statistics from top Chinese agencies, as many as 248 million people, or nearly 18% of the population, may have been infected with the virus in the first 20 days of December.
Businesses cannot predict the long-term impact of the outbreak on their business.
Analysts said that while the wave may ease in the coming weeks, it could return during the Chinese New Year in late January 2023.
Michael Hart, president of the American Chamber of Commerce in China, said that foreign direct investment will take about a year to fully recover after tourism reopens. China has yet to change its quarantine policy for international visitors to the mainland.
Eric Zheng, president of the American Chamber of Commerce in Shanghai, pointed out that companies have to find ways to solve some basic problems and provide employees with health and pandemic resources, including antigens, masks, and medicine. Those supplies are running out.
Soaring COVID infections are keeping people at home and causing a slump in travel and economic activity. That could hamper authorities’ efforts to revive growth in 2023.