Covid cases are breaking out everywhere in China. From the central province of Gansu, eastern provinces of Anhui, Jiangsu, Shandong, and southeastern province of Jiangxi, to the southern province of Hainan. Many outbreaks are in big cities, like Shanghai, and Beijing, among others.
In fact, out of 31 provincial-level regions, only five can proudly proclaim zero-Covid status since Shanghai officially ended lockdown in early June.
And within one week, China recorded a total of 2,300 cases all over the country.
This new outbreak is all under the common culprit – the Omicron BA.5. Now the dominant strain in the US, the BA.5 is considered the most infective version yet of Omicron because it could evade immunity built up by previous infections and vaccines.
The Omicron BA.5 broke out first in Xian, a city in the center, triggering a one-week lockdown here. Three more cases were found the same day in Beijing, as officials noted one day later.
The rising Covid cases and the arrival of this most transmissible disease raised fears of another widespread wave of lockdowns.
Signs of the Shanghai-like sorrow are spreading from city to city. Some areas place restrictions on public spaces, like shutting down gyms, bars, and cinemas, banning dining at restaurants, and enforcing working from home. If lucky, the restriction might last for a week, like in Haikou, Hainan. If not, there is no notice for a reopening date, and a looming threat of total and prolonged lockdown exists.
Macau, China’s casino hub and Hong Kong’s neighbor has been struggling with rising cases for the past month. On Monday, it registered 59 cases, which is a big deal in Zero-Covid China. In more than two years of keeping covid under control, over 680,000 residents are bracing for the first citywide lockdown.
As everyone knows, lockdown equals economic slump, rattled stock markets, and investors’ woe. You name it.
According to Chinese data provider Wind, China’s GDP is forecast to grow by 1.4 percent from a year ago in the April-June period. This is China’s lowest quarterly growth rate in more than two years, the direct cost of lockdowns and other hardline Covid measures imposed during its “darkest hours” of April and May.
Under these circumstances, i.e., China’s hardline with zero-Covid policy and boiling rivalry with the West, economists say even a rebound in the second half of 2022 might not be enough for China to hit the annual growth target.
China’s stock market also suffers. CSI300 Index, which tracks the most significant companies listed in Shanghai and Shenzhen, fell 1.7% on Monday, while Hong Kong’s benchmark Hang Seng Index slid 2.8%. The downturn comes mainly from the stock selloff in energy and raw materials producers, retailers, and internet companies.
“Investors still have the muscle memory of the dark days of the monthslong Shanghai lockdown earlier this year and worry that we might be going back.”
The market was also stunned by a seven-day lockdown in Macau, which shut the casinos in the world’s biggest gambling hub. The shares of two casino operator giants, Wynn Macau and Sands China, dropped more than 7%.