As reported by Financial Times on July 18, China is struggling to stop the spread of the highly transmissible BA.5 Omicron subvariant despite the harm of the Zero-Covid approach to the world’s second-largest economy. As a result, China may see further lockdowns and mass testing.

According to an analysis released on July 18 by Japanese investment bank Nomura, 41 cities across China are under full or partial lockdowns or district-based controls, covering 264 million residents, and accounting for about 18.7% of the nation’s economic activity.

The situation had worsened from a week ago, when China imposed restrictions on 31 cities, affecting 247.5 million people and making up 17.5% of the economy.

Yanzhong Huang, a senior fellow for Global Health at the Council on Foreign Relations think-tank, says the spread of BA.5 cases in more Chinese cities indicates a “new wave of Covid outbreaks.”

He adds, “Under the current Zero-Covid strategy, [this] will trigger more frequent and extensive government interventions including mass PCR testing and lockdowns.”

Analysts from Goldman Sachs commented that coronavirus risk remains the most crucial determinant of China’s growth prospects.

The latest data shows China’s GDP growth was only 0.4% in the second quarter of this year, down from 4.8% in the first quarter. In addition, it indicates the sweeping costs of Shanghai’s recent prolonged lockdown, supply chain disruptions, and reduced mobility nationwide.

Denis Kinane, a professor of immunology and pathology and co-founder of Cignpost Diagnostics, says, “Zero-Covid is no longer sustainable—the virus has evolved and become more transmissible.”

Kinane expects BA.5 will become the dominant strain in China over the next few months.

China’s CDC reported on July 19 that 237 new positive cases and 539 asymptomatic infections were recorded on July 18.

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