Shanghai hits key milestone in COVID battle as China cases fall

By Brenda Goh and Min Zhang

SHANGHAI/BEIJING (Reuters) - Shanghai said it detected no new COVID-19 cases outside quarantine areas for Friday, hitting a key milestone in its battle to contain the virus, which has paralysed the city of 25 million and seen Beijing scramble to avert a similar crisis.

Scenes of homes and buildings in China's most populous city being caged to prevent residents from leaving have grabbed global headlines in recent weeks at a time when most other major cities in the world are learning to live with coronavirus.

Some residents, who have been cooped up at home for more than a month, leading to anger and frustration, have struggled to find food and other daily necessities, and shown rare public opposition to the government's stringent controls.

But if the campaign works, it would mark a victory for Chinese President Xi Jinping's zero-tolerance approach to COVID-19 in a year when he is expected to secure a precedent-breaking third leadership term.

Although Shanghai city officials did not discuss the milestone at their daily news conference, it was cheered on Chinese social media, with the topic 'Shanghai sees zero-COVID transmission at the community level' receiving more than 190,000 views on Saturday morning on the Weibo (NASDAQ:WB) platform.

"Shanghai has finally reached zero at the community level!!! May Shanghai wake up as soon as possible!!," said a post from one netizen.

"There is hope that we can be released after the May holiday," said another.

Zero cases outside quarantine areas in Shanghai on Friday compared to 108 on Thursday. Other Chinese cities under lockdown began easing curbs after halting transmission outside quarantine areas.

But some cast doubt over the milestone, noting that most of Shanghai's residents were locked in some form of quarantine.

On Saturday, health authorities said there were close to 16,000 sealed-off areas in Shanghai, with more than 4 million people prevented from leaving their homes. A further 5.4 million people were blocked from leaving their compounds.

"The city's epidemic and prevention control is currently still at a critical state, and the trend is still that people need to strengthen controls," said Zhao Dandan, deputy director of Shanghai's health commission. "Let us all hold fast to this hard-won level of defence we have reached."

The battle to curb the highly transmissible Omicron variant in Shanghai has come at a cost for the economy, businesses and people, while delivery companies have been overwhelmed and logistic chains gummed up by the restrictions.

Shanghai city officials, who say they are eager for factories to get back to work, also said 80% of an initial white list of 666 prioritised companies had restarted production and that they had drawn up a second list of 1,188 firms.

Infections in the world's most populous country are easing as it enters the April 30-May 4 Labour Day break, traditionally one of China's busiest tourist seasons, but which is taking a huge hit this year due to the virus.

While official figures show a decline in infections in Shanghai, some observers say authorities have been less strict in making people take tests in recent days.

In the capital, Beijing, authorities are racing to detect COVID cases and isolate those who have been in contact with infected people.

Compounding frustrations in both cities, officials have provided no timeline or exit strategy for when things might resume to some semblance of normality.

Nomura estimates 46 cities are in full or partial lockdowns, affecting 343 million people. Societe Generale (OTC:SCGLY) estimates that provinces experiencing significant mobility restrictions account for 80% of China's economic output.

In response to COVID and other headwinds, China will step up policy support for the economy, a top decision-making body of the Communist Party said on Friday, lifting stocks from recent two-year lows.

Shanghai recorded 47 new COVID-19 deaths on April 29, down from 52 a day earlier, the local government said on Saturday.

Some have questioned the fatality rate from COVID as many residents have said relatives or friends have died after catching coronavirus as early as March.

Beijing reported 48 new symptomatic COVID-19 cases for April 29, compared with 47 cases a day earlier, Xinhua news agency said on Saturday. The city also recorded six asymptomatic cases for April 29, versus two a day earlier, it said.

Mainland China reported 10,793 new COVID-19 cases on April 29, down from 15,688 new cases a day earlier, the National Health Commission said on Saturday.