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China’s capital Beijing is experiencing an “explosive” Covid-19 outbreak connected to a restaurant, a government spokesman said yesterday, as the commercial hub, Shanghai, conducted mass testing to contain a jump in cases tied to a hair salon.  The warning followed a new tightening of Covid curbs in Beijing since Thursday, with at least two districts closing some entertainment venues after a flare-up in a neighbourhood full of nightlife, shopping and embassies. While China’s infection rate is low by global standards, it maintains a zero-Covid policy, citing the need to protect the elderly and the medical system, even as other countries try to live with the virus.  So far, the country of 1.4bn has seen just 5,226 deaths from Covid-19. Beijing authorities said on Saturday that all 61 new cases uncovered in the city on Friday had either visited the Heaven Supermarket or had links to it. “The recent outbreak ... is strongly explosive in nature and widespread in scope,” Xu Hejian, spokesperson of the Beijing municipal government, told a news briefing. The capital had registered 46 new local cases on Saturday as of 3pm, all people already in isolation or under observation, health official Liu Xiaofeng said. The city did not announce new curbs at the briefing, but later the Beijing sports administration said all off-campus and “offline” sports activities for teens would be cancelled from today. So far, 115 cases and 6,158 close contacts linked to the restaurant have been reported, throwing the city of 22mn back into a state of anxiety. Beijing only relaxed curbs less than two weeks ago that had been imposed to fight a major outbreak that began in April.  The sprawling Universal Beijing Resort - a theme park on the city’s outskirts - on Friday rescinded a plan to reopen. City authorities said three of its workers had visited the Heaven Supermarket restaurant.  Many neighbourhoods in the capital have been put under lockdown, with residents told to stay home. In Shanghai, officials announced three new confirmed local cases and one asymptomatic case detected outside quarantined areas on Saturday, as nearly all the city’s 25mn residents began a new round of Covid tests. Authorities ordered PCR testing for all residents in 15 of Shanghai’s 16 districts this weekend, and five districts barred residents from leaving home during the testing period. A city official said residents should complete at least one PCR test a week until July 31. China’s most populous city only lifted a gruelling two-month Covid-19 lockdown on June 1.  “I am a little bit worried because if there are positive cases in the compound, it will be put into a sealed situation,” said Shanghai resident Shi Weiqi. “I will also stock up on some supplies properly in case the previous situation happens again.” Shanghai authorities said they had also reprimanded and dismissed several district-level officials for lapses at a hotel that was used to quarantine arrivals from overseas, pinpointed as one of the sources of Shanghai’s wave of the Omicron variant of coronavirus.  They also said they had warned or dismissed some executives at a state-owned firm that owned the Red Rose beauty salon, where three cases were found among workers this week. The salon’s employees had not followed guidelines to undertake PCR testing daily, they said. On Saturday, Shanghai reported seven new local symptomatic cases for the previous day, a rise of one, of which six were detected outside of quarantined areas. The city also recorded nine new local asymptomatic cases, up from six the previous day. In total, mainland China reported 210 new coronavirus cases for June 10, of which 79 were symptomatic and 131 were asymptomatic, the National Health Commission said. That was up from 151 new cases a day earlier, 45 of them symptomatic and 106 asymptomatic. As of Friday, mainland China had confirmed 224,659 cases with symptoms.

Beijing will “not hesitate to start a war” if Taiwan declares independence, China’s defence minister warned his US counterpart yesterday, the latest salvo between the superpowers over the island. The warning from Wei Fenghe came as he held his first face-to-face meeting with US Defence Secretary Lloyd Austin on the sidelines of the Shangri-La Dialogue security summit in Singapore. Beijing views Taiwan as its territory and has vowed to one day seize the island, by force if necessary, and US-China tensions over the issue have soared in recent months. Wei warned Austin that “if anyone dares to split Taiwan from China, the Chinese army will definitely not hesitate to start a war no matter the cost”, defence ministry spokesman Wu Qian quoted the minister as saying during the meeting. The Chinese minister vowed that Beijing would “smash to smithereens any ‘Taiwan independence’ plot and resolutely uphold the unification of the motherland”, according to the Chinese defence ministry. He “stressed that Taiwan is China’s Taiwan...Using Taiwan to contain China will never prevail”, the ministry said. Austin “reaffirmed the importance of peace and stability across the (Taiwan) Strait, opposition to unilateral changes to the status quo, and called on (China) to refrain from further destabilising actions toward Taiwan”, according to the US department of defence. Tensions over Taiwan have escalated in particular due to increasing Chinese aircraft incursions into the island’s air defence identification zone (ADIZ). US President Joe Biden, during a visit to Japan last month, appeared to break decades of US policy when, in response to a question, he said Washington would defend Taiwan militarily if it is attacked by China. The White House has since insisted its policy of “strategic ambiguity” over whether or not it would intervene has not changed. With concerns mounting over China-Taiwan tensions, Japanese Prime Minister Fumio Kishida issued a stark warning at the summit: “Ukraine today may be East Asia tomorrow”. The world must be “prepared for the emergence of an entity that tramples on the peace and security of other countries by force or threat without honouring the rules,” he said. He repeatedly called for the “rules-based international order” to be upheld. Austin is the latest senior US official to visit Asia as Washington seeks to shift its foreign policy focus back to the region from the Ukraine war. As well as on Taiwan, China and the US have been locked in a range of other disputes. They have been at loggerheads over Russia’s invasion of Ukraine, with Washington accusing Beijing of providing tacit support for Moscow. China has called for talks to end the war, but has stopped short of condemning Russia’s actions and has repeatedly criticised American arms donations to Ukraine. China’s expansive claims in the South China Sea have also stoked tensions with Washington. Beijing claims almost all of the resource-rich sea, through which trillions of dollars in shipping trade passes annually, with competing claims from Brunei, Malaysia, the Philippines, Taiwan and Vietnam. Austin arrived in Singapore late Thursday, and held a series of meetings with his counterparts yesterday. At a meeting with Southeast Asian defence ministers, he spoke about Washington’s “strategy in maintaining an open, inclusive and rules-based regional security environment”, according to a statement from the Singapore government. His comments were a veiled reference to countering China’s increasing assertiveness in the region.

Ten people have died in central China as torrential rains lashed Hunan province, forcing the evacuation of millions of thousands, state media reported. The downpours, which began on June 1, have forced the evacuation of around 286,000 people, with more than 2,700 homes collapsed or seriously damaged, the official Xinhua news agency reported Wednesday. As of Wednesday, 10 people were killed and three were missing, Hunan provincial official Li Dajian said, according to the agency. "Heavy rains have caused the water levels of rivers and lakes to rise significantly," the provincial government said in a statement on Thursday. "The whole province at all levels is responding actively and making every effort to prevent (disasters)." The rains have impacted almost all of Hunan province with some weather stations reporting "historic levels" of precipitation, Xinhua said. It cited local authorities as saying 1.79 million people have been "affected", without providing details. Authorities have sent tents, foldable beds, food and clothing to the stricken areas, Xinhua added. Floods are fairly common in central and southern China, where the humid summer often brings heavy rains. China experienced its worst floods in a decade last year when deluges in central regions killed more than 300 people. Scores died in floods and mudslides in the worst-hit city of Zhengzhou, where residents also became trapped in subway carriages, underground car parks and tunnels. Experts believe that disaster was likely made worse by human-induced climate change.

Shanghai will lock down a district of 2.7 million people on Saturday to conduct mass coronavirus testing, city authorities said, as the Chinese metropolis struggles to fully emerge from punishing curbs. The city eased many restrictions last week, after confining most of its 25 million residents to their homes since March as China battled its worst Covid outbreak in two years. But the lockdown was never fully lifted, with millions of thousands in China's biggest city still restricted to their homes and multiple residential compounds put under fresh stay-home orders. The southwestern district of Minhang, home to 2.7 million people, will be placed under "closed management" on Saturday morning and all residents will be tested, district authorities said in a social media post on Thursday. "The closure will be lifted after samples have been collected," they added, without giving a specific time or date. The statement also did not say what measures would be imposed if any district residents test positive. Under China's stringent zero-Covid approach, all positive cases are isolated and close contacts -- often including the entire building or community where they live -- are made to quarantine. Shanghai reported nine new local infections on Thursday -- none in Minhang. The district's announcement sparked fear among some social media users that the lockdown could be prolonged beyond Saturday if any cases are found. "You need to clarify if (the lockdown) will really be lifted after samples are collected," one user wrote on Weibo. "If there are abnormal results after the tests, what will you do? Continue the lockdown?" asked another. The lockdown in Shanghai -- a major global shipping hub -- had threatened to pile further pressure on already-strained international supply chains. But the city has slowly come back to life in recent days. Commuters are back on subways and buses as people return to working in their offices, while residents have gathered in parks and along the city's historic waterfront. But others are chafing under continued restrictions, with residents in one compound in the downtown Xuhui district protesting against the rules this week. China's capital Beijing, meanwhile, is transitioning more smoothly towards normality after shutting restaurants, gyms and subway stations last month to stamp out a smaller outbreak.

* Chinese space station expected to be built by end-2022 * Shenzhou-14 astronauts to oversee arrival of final two modules * Space station to mark permanent Chinese inhabitation in space China sent three astronauts on Sunday on a six-month long mission to oversee a pivotal period of construction of its space station, whose final modules are due to be launched in the coming months. The space station, when completed by the year-end, will lay a significant milestone in China's three-decades long manned space programme, first approved in 1992 and initially code-named "Project 921". It will also flag the start of permanent Chinese habitation in space. Chinese astronauts Chen Dong, Liu Yang and Cai Xuzhe attend a see-off ceremony before the launch of the Long March-2F carrier rocket. The completion of the structure, about a fifth of the International Space Station (ISS) by mass, is a source of pride among ordinary Chinese people, and caps President Xi Jinping's 10 years as leader of the ruling Communist Party. A Long March-2F rocket, which was used to launch China's first crewed spaceflight on the Shenzhou-5 mission in 2003, lifted off from the Jiuquan Satellite Launch Center in the Gobi Desert in northwest China at 10:44 a.m. (0244 GMT) with the spacecraft Shenzhou-14, or "Divine Vessel", and its three astronauts, a live broadcast by state television showed. "I watched the launch of Shenzhou-5 when I was a primary student, and now we have Shenzhou-14," Zanna Zhang, a social media developer, told Reuters. "Of course I'm super excited, and I'm so proud as a Chinese. We're one step closer to becoming a space superpower," the 25-year-old said. Astronauts Cai Xuzhe, Chen Dong and Liu Yang attend a news conference before the Shenzhou-14 spaceflight mission at Jiuquan Satellite Launch Center near Jiuquan, Gansu province, Saturday. China Daily via REUTERS Construction began in April last year with the launch of the first and largest of its three modules - Tianhe - the living quarters of visiting astronauts. The lab modules Wentian and Mengtian are to be launched in July and October, respectively. Shenzhou-14 mission commander Chen Dong, 43, and team mates Liu Yang, 43, and Cai Xuzhe, 46, all from China's second cohort of astronauts, will live and work on the space station for about 180 days before returning to Earth in December with the arrival of the Shenzhou-15 crew. Former air force pilot Chen with Liu, who became China's first female astronaut in space a decade ago, and space mission debutant Cai, will oversee the rendezvous, docking and integration of Wentian and Mengtian with the core module. They will also install equipment inside and outside the space station and carry out a range of scientific research. "The Shenzhou-14 mission is a pivotal battle in the construction stage of China's space station," Chen told a news conference in Jiuquan on Saturday. "The task will be tougher, there will be more problems and the challenges will be greater." When completed, the T-shaped space station can accommodate as many as 25 lab cabinets, each a micro lab that can be used to conduct experiments. Wentian will be equipped to support life science research while Mengtian will focus on microgravity experiments. Wentian will also have an airlock cabin for extravehicular trips, as well as short-term living quarters for astronauts during crew rotations. The space station is designed for a lifespan of at least a decade. Its ability for long-term accommodation of just three astronauts, compared with seven on the ISS, has not deterred China from extending invitations to foreign astronauts in its ambition to internationalise the space station. The three-module station could be expanded into a four-module cross-shaped configuration in the future, a deputy designer of the space station told Chinese media last year. Mirroring the ISS, spacecraft and modules launched by other nations are also welcome to dock with and become a long-term member of the Chinese station. Commercial human spaceflight to the station is also being explored.

At least four people are dead and 14 others injured after two earthquakes hit southwestern China on Wednesday, state media reported. A shallow 6.1-magnitude quake hit a sparsely populated area in Sichuan province about 100 kilometres west of provincial capital Chengdu, broadcaster CCTV said. It was followed three minutes later by a second quake of magnitude 4.5 in a nearby county where the deaths and injuries occurred, according to CCTV. Footage obtained by the broadcaster showed dozens of schoolchildren screaming and ducking under desks as their building started to shake, before dashing out of the classroom with arms over their heads. Another video posted on social media by state-run broadcaster CGTN appeared to show the first quake sparking a landslide that damaged cars and left rocks and soil strewn over a road. "I felt it extremely clearly -- the door of my office kept swinging back and forth," said a worker surnamed Guo who works in a high-rise block in Chengdu. "Some of my colleagues ran for the stairs to get to... a wide-open space," he told AFP. Authorities in the city of Ya'an dispatched more than 4,500 people to the quake area, including emergency rescue workers, firefighters and military police, CCTV reported. It said the city was "going all out to rescue those who have been trapped... and reduce the number of dead to the greatest extent possible". Officials were also scrambling to "ensure no casualties are caused by secondary disasters", CCTV added. The China Earthquake Networks Center said the first quake, in Ya'an's Lushan county, struck at a depth of 17 kilometres at about 5 pm local time. The US Geological Survey said the quake registered a magnitude of 5.9 and was shallower at a depth of 10 kilometres. Tremors were felt in cities across Sichuan province, damaging some telecommunications lines, state media reported. Provincial authorities said some buildings had been damaged but there were no initial reports of any structures collapsing. At a press briefing Wednesday evening, officials at the provincial earthquake bureau said the first quake was an aftershock from a magnitude 7.0 quake in 2013 that killed around 200 people. Mountainous Sichuan -- a popular tourist destination home to China's giant pandas -- is an earthquake-prone area. A shallow quake on the border with neighbouring Yunnan province in January this year injured more than 20 people. Last September three people were killed and dozens of others injured when another shallow quake damaged tens of thousands of homes. A magnitude 8.0 quake in 2008 in Sichuan's Wenchuan county cost tens of thousands of lives and caused enormous damage. Among the dead were thousands of children killed when poorly constructed school buildings collapsed, though the government did not release an exact death toll as the issue took on a political dimension.

Following two months of frustration, despair and economic loss, Shanghai’s draconian Covid-19 lockdown ended today morning, prompting celebrations tempered with fear that an outbreak could return. Most of Shanghai’s 25mn residents can now freely leave home, return to work, use public transport and drive their cars — a moment that for many in China’s largest and most cosmopolitan city felt like it would never arrive. At midnight, small groups gathered in the city’s former French Concession neighbourhood whistled, shouted “ban lifted” and celebrated. Earlier, streets were lively as residents picnicked on grassy patches and children rode bikes down car-less roads. Dancing retirees, a common evening sight in Chinese cities, strutted their stuff for the first time in months in open air plazas and along the Huangpu river. Shanghai Disneyland, which has yet to announce a reopening date, livestreamed a lightshow to “celebrate the lifting of Shanghai’s lockdown”. They used a Chinese expression that also means “ban” that city officials have avoided. Under streetlamps, barbers gave haircuts to residents who had grown shaggy under lockdown. On the WeChat social media platform, shops announced their reopening plans. “I walked the dog and the dog is pretty excited, because it has been a really long time for it to come outside,” said Melody Dong, who was looking forward to eating hot pot and barbecue — foods that are difficult to make at home. Shanghai’s ordeal has come to symbolise what critics say is the unsustainability of China’s adherence to a zero-Covid policy that aims to cut off every infection chain, at any cost, even as much of the world tries to return to normal despite ongoing infections. The lack of a roadmap to exit from an approach that is increasingly challenged by the highly contagious Omicron variant has rattled investors and frustrated businesses. Covid curbs in Shanghai and numerous other Chinese cities have battered the world’s second-largest economy and tangled global supply chains, although case numbers have improved and curbs have eased from the depths of April’s lockdowns. China says its approach, a signature policy of President Xi Jinping, is needed to save lives and prevent its healthcare system from being swamped. The uncertainty and discontent caused by China’s Covid management has created unwanted turbulence in a sensitive political year, with Xi poised to secure a third leadership term in the autumn. “The mood is a bit like high school days. On the eve of the school year I was full of expectations for the new semester but I feel a little uneasy in my heart,” wrote one user of the Twitter-like Weibo. During two months, numerous residents of the country’s most important financial and economic hub struggled to get enough food or medical care. Families were separated and hundreds of thousands were forced into centralised quarantine facilities. At the factories and offices that remained open — including those of Shanghai government officials — workers lived on-site in “closed-loops”, bunking on makeshift beds, with many of them only now able to return home. Curbs were lifted for about 22.5mn people in low-risk areas. Residents must still wear masks in public and avoid gatherings. Restaurant dining remains banned. Shops can operate at 75% capacity. Gyms will reopen later. Residents will have to test every 72 hours to take public transport and enter public venues, heralding what may become a “new normal” in many Chinese cities. Those testing positive, and their close contacts, face onerous quarantines. During lockdown, Shanghai residents staged rare protests, banging on pots and pans from their windows and evading censors to vent on China’s heavily policed social media. Frustrations stemmed from the lockdown itself as well as heavy-handed and often uneven enforcement and unclear communication. “The Shanghai government needs to make a public apology in order to obtain the understanding and support of the people of Shanghai and repair the damaged relationship between the government and the people,” Qu Weiguo, a professor at Fudan University’s school of foreign languages, posted on WeChat. Yesterday, the city’s largest quarantine facility - a 50,000-bed section of the National Exhibition and Convention Centre - discharged the last two of the 174,308 Covid-positive cases who had been housed there. It declared itself shut.

Shanghai authorities on Tuesday began dismantling fences around housing compounds and ripping police tape off public squares and buildings, to the relief of the city's 25 million residents, before a painful two-month lockdown is lifted at midnight. On Monday evening, some of the people allowed out of their compounds for brief walks took advantage of suspended traffic to congregate for a beer and ice cream on deserted streets, but there was a sense of wariness and anxiety among residents. "I feel a little nervous," said Joseph Mak, who works in education. "It's hard to believe it's actually happening." Most will be stuck indoors again until midnight, as they have been for the past two months under a ruthlessly enforced lockdown that has caused income losses, stress and despair to millions struggling to access food or get emergency healthcare. The prolonged isolation has fuelled public anger and rare protests inside Shanghai and battered the city's manufacturing and export-heavy economy, disrupting supply chains in China and around the world, and slowing international trade. Life is set to return to something more like normal from Wednesday, when the passes issued by residential buildings for people to go out for a few hours will be scrapped, public transport will resume and residents can go back to work. "This is a day that we dreamed of for a very long time," Shanghai government spokeswoman Yin Xin told reporters. Yin said daily online news conferences will be discontinued as her colleagues, who have lived on site for the past two months as required by Covid rules, will return home after midnight. "Everyone has sacrificed a lot. This day has been hard-won, and we need to cherish and protect it, and welcome back the Shanghai we are familiar with and missed." By a creek in Shanghai on Tuesday, a marinated goose store was restocking shelves; a bar was doing last-minute renovations; cleaners were scrubbing shop windows. Curbs will ease for about 22.5 million people in low-risk areas. Residents will still have to wear masks and avoid gatherings. Dining inside restaurants remains banned. Shops can operate at 75% capacity. Gyms will reopen later. read more Residents will have to tests every 72 hours to take public transport and enter public venues. Tough quarantine is still in store for anyone catching Covid and their close contacts.   LOCKDOWN-WARY China is alone among major countries enforcing a "zero Covid" policy of eradicating outbreaks at just about any cost. The highly-transmissible Omicron variant is prone to making comebacks. Julian MacCormac, chair of the British Chamber in China, said Shanghai brought Covid under control at "very significant personal and economic cost". "What has materially changed to ensure that this will not happen again?," he asked. "That’s where the uncertainty lies." Todd Pearson, managing director of Camel Hospitality Group, which operates some restaurants, bars and gyms in and around Shanghai, is wary. His restaurants can only do deliveries, which bring about 5% of revenue, not enough to pay salaries and rent. At least from midnight his workers who have been sleeping on site can finally go home. "I’m hopeful that they will rush things along to restart the economy," Pearson said. "I just hope it’s not at the cost of more outbreaks. I’m not sure many businesses or the people could handle much more." Economic activity in China has somewhat recovered in May from a dismal April as Covid curbs in major manufacturing hubs were gradually relaxed, although movement controls still depressed demand and restrained production.   FUN WITH FLAGS Shanghai reported 31 cases for May 30, down from 67 a day earlier, mirroring a downtrend throughout China to less than 200 infections nationwide, a fraction of what most other countries are reporting. The end of Shanghai's lockdown does not mean returning to pre-Covid ways of living. Some banking clerks said they will have to wear full hazmat suits and face shields as they start facing the public from Wednesday. One clerk said he would take some basic supplies to work, in case a colleague tests positive and staff are required to isolate in the office. The lockdown has fuelled rare protests, with people at times banging pots and pans outside their windows to show their discontent with the strict measures, and many sharing frustrating interactions with authorities on social media. The public displays of resentment come during a sensitive year for President Xi Jinping, who is expected to secure a third leadership term this autumn. One compound hanged a Chinese flag for residents to take pictures with as they lined up for one more PCR test before the reopening. "It’s worth celebrating," said one volunteer at the testing site, who was more optimistic about Covid than those getting their noses swabbed. "Probably we won’t have it again in the rest of our lives.”  

* Shanghai to remove many Covid curbs on firms * City announces more tweaks to testing requirements * Beijing reopens some public transport, some malls Shanghai said on Sunday "unreasonable" curbs on businesses will be removed from June 1 as it looks to lift its Covid-19 lockdown, while Beijing reopened parts of its public transport as well as some malls and other venues as infections stabilised. The Chinese commercial hub of 25 million people aims to essentially end from Wednesday a two-month lockdown that has severely damaged the economy and seen many residents lose income, struggle to source food and to cope with the isolation. The painful coronavirus curbs in major Chinese cities run counter to trends seen in the rest of the world, which has largely tried to return to normal life even as infections spread. Shanghai, China's most populous city, will end many conditions for businesses to resume work from June 1. The city also launched measures to support its economy, including reducing some taxes on car purchases, accelerating issuance of local government bonds, and speeding up approvals of real estate projects. Shanghai will ask banks to renew loans to small and medium firms worth a total of 100 billion yuan ($15 billion) this year. "We will fully support and organise the resumption of work and production of enterprises in various industries and fields," vice mayor Wu Qing told reporters, adding that "unreasonable" Covid restrictions on businesses would be lifted. Wu did not give details of which restrictions would be cancelled. Shanghai in April started publishing "white lists" of important manufacturers in the auto industry, life sciences, chemicals and semiconductors allowed to resume operations. But many of the priority companies had suppliers who were unable to reopen and so they still faced logistical bottlenecks. Many industry executives also complained about onerous Covid curbs, as they needed to find sleeping quarters for staff trying to isolate and to implement rigorous disinfection. Most businesses in the city are still shut. All "white lists" would be abolished, Wu said. Earlier on Sunday, city government spokeswoman Yin Xin said Shanghai would ease testing requirements from Wednesday for people who want to enter public areas, to encourage a return to work. "The current epidemic situation in the city continues to stabilise and improve," Yin said, adding Shanghai's strategy was "pivoting towards normalised prevention and control". People entering public venues or taking public transport would need to show a negative PCR test taken within 72 hours, up from 48 hours previously. Bus services within the Pudong New Area, home to Shanghai's largest airport and the main financial district, would fully resume by Monday, officials said. Plaza 66, a mall in central Shanghai that hosts Louis Vuitton and other luxury brands, reopened on Sunday. Authorities have been slowly relaxing curbs, with a focus on getting manufacturing going again. More people have been allowed to leave their homes and more businesses can reopen, though many residents remain largely confined to housing compounds, and most shops are only open for delivery service. Private cars are not allowed out without approval, and most of the city's public transport is shut. Authorities have yet to announced detailed plans for how the lockdown will be lifted. In the capital Beijing, libraries, museums, theatres and gyms were allowed to reopen on Sunday, though with limits on numbers of people, in districts that have seen no community Covid cases for seven consecutive days. The districts of Fangshan and Shunyi will end work-from-home rules, while public transport will largely resume in the two districts as well as in Chaoyang, the city's largest. Still, restaurant dining is banned throughout the city. Shanghai reported just over 100 new Covid cases on Sunday, while Beijing recorded 21, both in line with a falling trend nationwide. China's economy has shown signs of recovery this month following an April slump but activity is weaker than last year and many analysts expect a second-quarter contraction. The strength and sustainability of any recovery will depend largely on Covid, with the highly transmissible Omicron variant proving hard to wipe out, and prone to comebacks. Investors have worried about the lack of a roadmap for exiting the zero-Covid strategy of ending all outbreaks at just about any cost, a signature policy of President Xi Jinping. He is expected to secure an unprecedented third leadership term at a congress of the ruling Communist Party in the autumn. Markets expect more support for the economy. "We expect policies to ease further on the fiscal front to boost demand, given downward pressures on growth and the uncertainty of the recovery pace," Goldman Sachs analysts wrote in a Friday note.

Prime Minister Boris Johnson yesterday said the British economy was not necessarily heading for a recession. Asked in an interview with Bloomberg UK whether the UK was headed for a recession, Johnson said “not necessarily at all.” Johnson added that Britain’s financial support package to help consumers meet rising energy costs will not be inflationary because it won’t necessarily lead to more discretionary spending. Asked by reporters if the policy could add to inflation, Johnson said: “The answer to that is no, because I don’t think that it will lead, necessarily, to more discretionary spending, simply because people’s outgoings are going to go up, or have been going up already as a result of the of the increased cost of energy and food.” Earlier Finance Minister Rishi Sunak said his new £15bn ($19bn) cost-of-living support package would have an impact of less than one percentage point on inflation. Sunak had been under heavy political pressure to act to alleviate the biggest squeeze on households’ disposable income since the 1950s, but some critics had warned more government spending risked exacerbating price pressures. “My view is that it will have a minimal impact on inflation,” Sunak told Sky News. Asked if it would be a one percentage point impact, he said: “Much, much less than that.” British inflation hit a 40-year high of 9% in April, and earlier this month the Bank of England warned it would reach double digits by the end of the year, as regulated energy tariffs were on course to surge by a further 40% in October. Sunak said on Thursday high inflation was now causing “acute distress”. The new measures are partly funded by a 25% windfall tax on oil and gas producers’ profits. Asked about a possible windfall tax on electricity generators too, Sunak said the government was looking at the industry’s profits. “What we want to do and we are going to do urgently is understand the scale of those profits, and then decide on the appropriate next steps,” he told Sky News. The squeeze on consumer spending risks pushing the economy into recession by the end of this year, but Sunak rejected parallels with 1970s-style “stagflation”. “I don’t share that pessimism,” Sunak told BBC radio.”I’m very confident about the outlook for our economy over time.” The government has announced £37bn of cost-of-living support measures this year, equivalent to nearly 1.5% of annual gross domestic product. Deutsche Bank estimated the latest measures would add 0.4% to GDP - mostly felt in 2023 - while Pantheon Macroeconomics reckoned it would add 0.7% to GDP over the second half of this year and substantially reduced the risk of recession. Britain’s inflation rate would fall by about 0.7 percentage points if the Office for National Statistics classed the £400 energy bill rebate at the heart of the plans as a price cut rather than an income transfer, Deutsche Bank added. But the medium-term impact on inflation would be marginal, and overall the BoE would still need to keep raising interest rates, it said.

China’s foreign ministry yesterday accused US Secretary of State Antony Blinken of “smearing” the country, after America’s top diplomat delivered a landmark policy speech calling for action to counterbalance Beijing’s influence. In the most comprehensive statement to date on China by US President Joe Biden’s administration, Blinken said on Thursday the Asian power posed “the most serious long-term challenge to the international order”. China has faced a chorus of warnings from the US and Western allies in recent days over its growing influence and global ambitions. Blinken warned on Thursday of China’s “intent to reshape the international order” and called on countries to defend the status quo. He also accused Beijing of raising tensions over Taiwan and said Beijing has “cut off Taiwan’s relations with countries around the world and (is) blocking it from participating in international organisations”. Beijing hit out angrily at the speech yesterday, saying it “spreads false information, exaggerates the China threat, interferes in China’s internal affairs and smears China’s domestic and foreign policies”. Foreign ministry spokesman Wang Wenbin told reporters that China “firmly opposed” the speech and it showed Washington sought to “contain and suppress China’s development and maintain US hegemony and power”. The US recently launched a loose new trade framework across Asia and has set up a forum with the European Union to set technological standards. The efforts are aimed at uniting like-minded nations as China dominates new fields, such as artificial intelligence. Blinken acknowledged a growing consensus that other nations cannot change the trajectory of China, saying that under President Xi Jinping it has become “more repressive at home, more aggressive abroad”. “There is growing convergence about the need to approach relations with Beijing with more realism,” he said. The speech by the US secretary of state contrasted with the approach under former president Donald Trump, whose administration spoke in stark terms of an all-out global conflict with China. On trips to Africa and Latin America, where China has invested billions of dollars in infrastructure, Blinken has downplayed US-China competition and has not asked nations to take sides. “We are not looking for conflict or a new Cold War. To the contrary, we’re determined to avoid both,” he said in his speech. “We don’t seek to block China from its role as a major power, nor to stop China — or any other country for that matter — from growing their economy or advancing the interests of their people.” But he said that defending the current global order, including international law and agreements, would “make it possible for all countries - including the US and China - to co-exist and co-operate”. Biden on Monday made waves by offering the most explicit pledge in decades that the US would militarily defend Taiwan from any invasion by Beijing. Pacific nations urged to shun China security deals Australia yesterday urged South Pacific nations to spurn China’s attempts to extend its security reach across the region, seeking to fend off a high-level charm offensive by Beijing. Foreign Minister Penny Wong was in Fiji on her first solo visit, seeking to woo island states after the Solomon Islands took Canberra by surprise last month by signing a wide-ranging security pact with China. “We have expressed our concerns publicly about the security agreement,” Wong told reporters in the capital of Suva. “As do other Pacific islands, we think there are consequences. We think that it’s important that the security of the region be determined by the region. And historically that has been the case. And we think that is a good thing.” In a duel for influence, China’s Foreign Minister Wang Yi was flying across the Pacific at the same time to discuss Beijing’s plan to dramatically expand its security and economic engagement.

Thousands of Covid-negative Beijing residents were forcibly relocated to quarantine hotels overnight due to a handful of infections, as the capital begins to take more extreme control measures resembling virus-hit Shanghai. Beijing has been battling its worst outbreak since the pandemic started. The Omicron variant has infected over 1,300 since late April, leading city restaurants, schools and tourist attractions to be closed indefinitely.  China's strategy to achieve zero Covid cases includes strict border closures, lengthy quarantines, mass testing and rapid, targeted lockdowns. Over 13,000 residents of the locked-down Nanxinyuan residential compound in southeast Beijing were relocated to quarantine hotels overnight Friday due to 26 new infections discovered in recent days, according to photos and a government notice widely shared on social media. "Experts have determined that all Nanxinyuan residents undergo centralised quarantine beginning midnight May 21 for seven days," authorities from Chaoyang district said Friday. "Please cooperate, otherwise you will bear the corresponding legal consequences." Social media photos showed hundreds of residents with luggage queueing in the dark to board coaches parked outside the compound.  "Some of us have been locked down for 28 days since April 23, and we all tested negative throughout," wrote one resident on the Twitter-like Weibo.  "A lot of my neighbours are elderly or have young children." "The transfer really makes us feel like we're in a wartime scene," resident and real estate blogger Liu Guangyu posted on Weibo early Saturday. Residents were told to pack their clothes and essential belongings, and that their homes would be disinfected afterwards, according to screenshots shared on Weibo.  Last month, thousands of negative Shanghai residents were bussed to makeshift quarantine centres hundreds of kilometres away as the metropolis of 25 million doubled down on efforts to contain the spread of the virus.   Weibo users expressed widespread anxiety that Beijing authorities were taking a similar approach to Shanghai, where residents have chafed under a months-long lockdown that has denied many people adequate access to food and medical care. The Weibo hashtag "All residents of Nanxinyuan compound were dragged to quarantine" was blocked by Saturday morning. "This is exactly the same as Shanghai, the first step is to cut off water and electricity, then demand keys... then disinfect homes. Electrical appliances, wooden furniture, clothes, food -- they're all done for," read one comment.  Beijing authorities on Saturday extended work from home guidance to one more district, one day after halting the vast majority of public bus and subway services.

Investigators looking into the crash of a China Eastern Airlines jet are examining the actions of the crew on the flight deck, with no evidence found of a technical malfunction, two people briefed on the matter said. In mainland China's deadliest aviation disaster for 28 years, the Boeing 737-800 crashed in the mountains of southern Guangxi on March 21, after a sudden plunge from cruising altitude, killing all 123 passengers and nine crew. The pilots did not respond to repeated calls from air traffic controllers and nearby planes during the rapid descent, authorities have said. On Tuesday, the Wall Street Journal said flight data from one of the black boxes indicated that someone in the cockpit intentionally crashed the plane, citing people familiar with the preliminary assessment of US officials. One source told Reuters that investigators were looking at whether the crash was a "voluntary" act involving crew inputs to the controls, though that does not necessarily mean the dive was intentional. The cockpit voice recorder was damaged during the crash and it is unclear whether investigators have been able to retrieve any information from it. Boeing Co, the maker of the jet, and the US National Transportation Safety Board (NTSB) declined to comment and referred questions to Chinese regulators. The Civil Aviation Administration of China (CAAC), which is leading the investigation, did not respond immediately to a request for comment. Screenshots of the Wall Street Journal story appeared to have been censored both on China's Weibo social media platform and the Wechat messaging app on Wednesday. The hashtag topics "China Eastern" and "China Eastern black boxes" are banned on Weibo, which cited a breach of laws, and users are unable to share posts on the incident in Wechat groups. In an April 11 response to internet rumors of a deliberate crash, the CAAC said the speculation had "gravely misled the public" and "interfered with the accident investigation work". On Wednesday, a woman who had lost her husband in the crash, asked to be identified only by her surname, Wen, said she had not seen the Wall Street Journal report but hoped the results of the investigation would be released soon. Wen added that she and other members of victims' families had signed an agreement with China Eastern that included a clause on compensation, but declined to say how much was offered. China Eastern did not immediately respond to a request for comment. The Wall Street Journal said the airline had said in a statement that no evidence had emerged that could determine if there were any problems with the aircraft. The 737-800 is a widely flown predecessor to Boeing's 737 MAX but lacks the systems linked to fatal 737-MAX crashes in 2018 and 2019 that brought a lengthy grounding of the MAX. China Eastern grounded its entire fleet of 737-800 planes after the crash but resumed flights in mid-April, a decision widely seen at the time as ruling out any immediate new safety concerns over Boeing's most widely used model. In a summary of an unpublished preliminary crash report last month, Chinese investigators did not point to any technical recommendations for the 737-800, which has been in service since 1997 with a strong safety record, according to experts. In a May 10 interview with Reuters, NTSB Chair Jennifer Homendy said board investigators and Boeing had traveled to China to assist the Chinese investigation, which had not found any safety issues requiring urgent action. Homendy said if the board had any safety concerns it would "issue urgent safety recommendations." The NTSB assisted Chinese investigators with the review of black boxes at its U.S. laboratory in Washington at China's request, despite political tension between the countries. CAAC said the NTSB confirmed that it did not release information about the China Eastern crash to media, the state-owned Global Times said. Shares of Boeing closed up 6.5%. A final report into the causes of the crash could take two years or more to compile, Chinese officials have said. Analysts blame most crashes on a cocktail of human and technical factors. Deliberate crashes are exceptionally rare globally. In March 2015, a Germanwings co-pilot deliberately flew an Airbus A320 into a French mountainside, killing all 150 on board. French investigators found the 27-year-old was suffering from a suspected "psychotic depressive episode," concealed from his employer. They later called for better mental health guidelines and stronger peer support groups for pilots.

Shanghai on Tuesday declared it had achieved "zero-Covid" across all its districts, sparking derision on social media as millions in China's biggest city remained under lockdown. Confronted with its worst outbreak since the beginning of the pandemic, China -- the last major economy still closed off to the world -- put the city of 25 million under heavy restrictions in early April. The government's insistence on squashing the Omicron-variant-driven outbreak prompted rare protests and angry scuffles with authorities as Shanghai residents reject the prolonged confinement and food shortages. "All 16 districts of Shanghai have already achieved zero-Covid at the community level," Shanghai health commission official Zhao Dandan told reporters on Tuesday. That means none of the over 1,000 new infections recorded on Tuesday was detected outside of quarantined areas, city authorities said. China's strategy to achieve zero Covid cases includes strict border closures, lengthy quarantines, mass testing and rapid, targeted lockdowns. Vice mayor Chen Tong said on Sunday that the city would gradually reopen businesses starting this week, without giving specifics. But millions in Shanghai were still unable to leave their residential compounds on Tuesday. More than 3.8 million people were officially still under the strictest forms of lockdown in the city, according to official figures. Social media erupted in disbelief at the gap between official statements and the reality of life under an enduring lockdown. "Since society has reached Covid-zero, why are people in Songjiang district still only allowed to go out once every two days?" a blogger on the Twitter-like Weibo asked. "Is this a parallel universe Shanghai?" asked another. In some areas of the city, restrictions have even been quietly tightened in recent days.  Live video broadcast Tuesday by Chinese media showed crowds gathering at Shanghai's Hongqiao Railway Station as train services leaving the city resumed. Meanwhile, multiple airlines resumed domestic flights out of Shanghai this week after nearly all routes out of the city were suspended during the outbreak. People are only allowed to leave Shanghai after receiving permission and taking multiple Covid tests.   - Economic slowdown -   China has shown no sign of giving up its protracted struggle to maintain zero Covid cases, despite the mounting economic costs of miserable retail, house and car sales and climbing unemployment. The country kept cases low for much of the pandemic through its strict strategy, but the surge in Omicron cases in recent months has raised questions about zero-Covid's sustainability. Chinese health officials on Monday said they had detected the country's first case of the highly transmissible Omicron subvariant BA.2.12.1 -- already widespread in countries including the US -- in a traveller arriving from Kenya. Beijing is mass testing residents almost every day after a surge in cases -- counted in the dozens each day but still enough to prompt tight restrictions on movement and association. Millions of people in the capital have been ordered to work from home and transport services have been suspended with people fearing a repeat of Shanghai's lockdown chaos. Tightened Covid rules on Beijing's university campuses also provoked a rare show of defiance from angry students over the weekend, with hundreds gathering outside one Peking University dormitory to protest new movement restrictions.  The recent lockdowns dragged retail sales and factory output in the country down in April to their lowest level since March 2020, with analysts warning that disruptions could extend into the summer.

* Shanghai tells some to stay home, not receive deliveries * Part of push to eliminate infections by late May -sources * Chinese capital Beijing imposes tightest curbs so far * Lawyers question legality of tough measures as anger grows * China export growth weakest in two years, currency falls China's two largest cities tightened Covid-19 curbs on Monday, fuelling public angst and even questions about the legality of its uncompromising battle with the virus that has battered the world's second largest economy. In Shanghai, enduring its sixth week of lockdown, authorities have launched a new push to end infections outside quarantine zones by late May, according to people familiar with the matter. While there has been no official announcement, residents in at least four of Shanghai's 16 districts received notices at the weekend saying they wouldn't be allowed to leave their homes or receive deliveries, prompting a scramble to stock up on food. Some of these people had previously been allowed to move around their residential compounds. "Go home!" a woman shouted through a megaphone at residents mingling below an apartment block impacted by the new restrictions on Sunday, a scene that might baffle other areas of the world that have opted to open up and live with the virus. "It was like a prison," said Coco Wang, a Shanghai resident living under the new restrictions. "We are not afraid of the virus. We are afraid of this policy." Meanwhile, in the most severe restrictions imposed in Beijing so far, an area in the southwest of the capital on Monday forbade residents from leaving their neighbourhoods and ordered all activities not related to virus prevention to halt. In other virus-hit districts of Beijing, residents have been told to work from home, some restaurants and public transport have closed, and additional roads, compounds and parks were sealed off on Monday. The restrictions have taken a heavy toll on China's economy. China's export growth slowed to its weakest in almost two years, data on Monday showed, as the central bank pledged to step up support for the slowing economy. The sluggish data drove China's yuan currency to a near 19-month low against the U.S. dollar. In a stark sign of the stresses for business, China's auto association estimated that sales last month dropped a staggering 48% year-on-year as Covid restrictions shut factories and crimped domestic demand. The curbs have also fuelled rare expressions of public anger, further inflamed by recent online accounts of Shanghai authorities forcing neighbours of Covid-positive cases into centralised quarantine and demanding that they hand over the keys to their homes to be disinfected. One video showed police picking a lock after a resident refused to open a door. In another, a voice recording of a call circulated on the internet of a woman arguing with officials demanding to spray disinfectant in her home even though she had tested negative. Reuters was not able to independently verify the videos. Professor Tong Zhiwei, who teaches law at the East China University of Political Science and Law, wrote in an essay widely circulated on social media on Sunday that such acts were illegal and should stop. Liu Dali, a lawyer from one of China's largest law firms, wrote a similar letter to authorities. Copies of both letters have been censored from the Chinese internet. Posts from Tong's social media account on the Weibo site were blocked late on Sunday. Liu and Tong did not respond to requests for comment. China is adamant that it will stick to its zero-Covid policy to fight a disease that first emerged in the city of Wuhan in late 2019, warning against criticism of a policy they say is saving lives. They point to much higher death tolls in other countries that have eased restrictions, or scrapped them altogether, in a bid to "live with Covid" even though infections are spreading. Beijing has been hoping to avoid the weeks of lockdowns that Shanghai has endured but the growing number of residential buildings under lockdown orders is unnerving residents. "I've already been working from home but I'm worried I might run out of daily supplies," said a 28-year-old resident of Changping district in north Beijing surnamed Wang after being barred from leaving her compound on Monday. In response to Reuters questions on the latest restrictions in Shanghai, the municipal government there said it "must insist on regulating the flow and control of the movement of people" and that each district was allowed to tighten measures according to its own situation. On Monday, Shanghai reported a drop in new cases for the 10th straight day. But the drop has not eased tensions on the ground. One video widely shared online showed a group of Shanghai residents confronting police officers and security personnel over whether their hardline measures were legal. "Not once have I heard that if one compound or one block or residential building has a single confirmed case, then hardline measures of locking up people like criminals are needed," a resident said in the recording. Reuters could not immediately verify the video, which was later deleted from social media site WeChat.

A former security chief who oversaw the crackdown on Hong Kong's democracy movement was anointed the business hub's new leader on Sunday by a small committee of Beijing loyalists. John Lee, 64, was the only candidate in a Beijing-backed one-horse race to succeed outgoing leader Carrie Lam. His elevation places a security official in the top job for the first time after a tumultuous few years for a city battered by political unrest and debilitating pandemic controls. Despite the city's mini-constitution promising universal suffrage, Hong Kong has never been a democracy, the source of years of public frustration and protests since the 1997 handover to China. Its leader is instead chosen by an "election committee" currently comprised of 1,461 people -- roughly 0.02 percent of the city's population. After a brief secret ballot on Sunday, 1,416 members voted for Lee while eight voted against according to officials. The rest did not cast ballots. "I declare that the only candidate Mr John Lee Ka-chiu is returned in the above mentioned election, congratulations," returning officer Justice Keith Yeung Kar-hung, announced. Protests have been largely outlawed in Hong Kong, with authorities using an anti-coronavirus ban on public gatherings of more than four people as well as a new national security law. Police ringed the exhibition centre with security, and 6,000 to 7,000 officers had been placed on standby, according to local media. The League of Social Democrats -- one of the only remaining pro-democracy groups -- held a three-person protest before polls opened, chanting "Power to the people, universal suffrage now". "This is what John Lee's new chapter looks like, a shrinking of our civil liberties," said protester Vanessa Chan as dozens of police officers looked on. "We know this action will have no effect, but we don't want Hong Kong to be completely silent," she added. Under President Xi Jinping, China is remoulding Hong Kong in its own authoritarian image after huge and sometimes violent democracy protests three years ago. Beijing deployed a sweeping security law to stamp out dissent and rolled out a new "patriots only" political system for Hong Kong to guarantee anyone standing for office is considered suitably loyal. While the democracy movement has been crushed, much of the population still resents Beijing's rule and chafes at the city's entrenched inequality. Hong Kong also faces economic difficulties thanks to two years of strict pandemic curbs that have damaged its business hub reputation and left residents cut off as rivals re-open. Under the slogan "Starting a new chapter for Hong Kong together", Lee has vowed to bring in "result-oriented" governance, forge unity and reboot the city's economy. A 44-page manifesto he released last week stuck to broad goals and offered few concrete policies or targets. Lee has said he will unveil more details when he makes his first policy address. Hong Kong's chief executives find themselves caught between the democratic aspirations of the city's residents and the authoritarian demands of Beijing's leaders. Outgoing leader Carrie Lam is on track to leave office with record-low approval ratings. According to a survey in March by the Public Opinion Research Institute, about 24 percent of the public has confidence in Lee, compared with 12 percent for Lam. Waiting in a line outside a restaurant on Sunday, 25-year-old resident Alex Tam said he and his friends were paying little attention to proceedings. "It's just an empty gesture," he told AFP. "If he didn't listen to the protesters, I don't see how he would listen to young people now, especially those who criticise the government." Retired businessman Yeung wing-shun was more positive saying he hoped Lee will guide Hong Kong with a "firm hand", adding that he believed the new leader could bring different sectors together. Lee will take office on July 1, the 25th anniversary of Hong Kong's handover to China from Britain. China agreed that Hong Kong could maintain certain freedoms and autonomy for 50 years after retaking control from Britain under a "One Country, Two Systems" formula. Beijing and Lee say that formula is still intact. Critics, including many Western powers, say it has been shredded. Lee is one of 11 senior Hong Kong and Beijing officials sanctioned by the United States because of the political crackdown.

China’s capital Beijing kicked off a fresh round of mass testing for Covid-19 yesterday and shut more bus routes and metro stations, as it seeks to avert the fate of Shanghai, where millions of residents have been locked down for over a month. The draconian movement curbs on Shanghai, an economic and financial hub, have caused frustration among its 25mn residents and triggered rare protests over issues such as access to food and medical care, loss of income and crowded as well as unsanitary conditions at central quarantine centres. While some people have been let out for light and air in recent weeks, residents for the most part say they still cannot leave their housing compounds. Beijing is striving to avoid an explosion in cases like that of Shanghai, China’s largest city, by conducting rounds of mass testing, banning restaurant dining-in services in multiple districts and shutting more than 60 subway stations, about 15% of the network. Shanghai cases have fallen for eight days and the city says its outbreak is under effective control, allowing it to shut some of the makeshift hospitals it raced to build as case numbers ballooned. But authorities have also indicated that a full easing is still far off, warning against complacency to stick to China’s zero-Covid goal. Underscoring that expectation, Shanghai officials on Saturday postponed the city’s “gaokao” university entrance exam by a month to early July. The last time that happened was in 2020, during the initial coronavirus outbreak. The city’s top Communist Party official, Li Qiang, a close ally of President Xi Jinping, told a Friday government meeting that it was “necessary to issue military orders at all levels, and take more resolute and powerful actions to overcome the great war and great tests,” according to an official statement. The number of infections in Shanghai outside areas under lockdown - a gauge of whether the city can further reopen - fell to 18 on Friday from 23 the day before. Total new cases declined slightly to around 4,000, data released on Saturday showed. Shanghai is also building thousands of permanent PCR testing stations, in line with other cities, as China looks to make regular testing a feature of everyday life. China’s Covid policy is increasingly out of step with much of the rest of the world, where governments have eased restrictions, or dropped them altogether, in a bid to live with Covid even as infections spread. But Chinese leaders this week reiterated their resolve to battle the virus, threatening action against critics of their strict measures. Beyond Shanghai, dozens of cities have imposed full or partial lockdowns, relaxing and tightening curbs at various times. The measures are exacting a mounting economic toll that has fuelled complaints from global industry groups and businesses at home. China’s auto association on Friday estimated that sales plunged 48% in April from a year earlier, as zero-Covid policies shut factories, limited traffic to showrooms and put the brakes on spending in the world’s largest car market. In Shanghai, although the government has provided guidelines on how companies can restart operations, a survey of Japanese firms in late April found most still struggling to restart due to the onerous requirements. Since Friday, organisers have cancelled, postponed or relocated a slate of major international sporting events set to take place in China in the second half of the year, including the Asian Games set for Hangzhou in September and Diamond League athletics meets originally scheduled for Shanghai on July 30 and Shenzhen on Aug. 6. The moves, which followed a government meeting on Thursday chaired by Xi that called for doubling down on the zero-Covid approach, defy a global sporting calendar that has largely returned to normal. Yesterday, Beijing kicked off the first of three new rounds of daily testing in five districts including the biggest, Chaoyang, home to embassies and large offices. Beijing officials said that while they had figured out the main Covid transmission chains, they still believed there were hidden infection sources in society and that the city could not lower its guard. The capital reported 45 new symptomatic Covid-19 cases for Friday, down from 55 a day earlier. It recorded eight asymptomatic cases, which China counts separately, versus 17 a day earlier.

Beijing residents tentatively returned to work yesterday after a muted five-day Labour Day holiday devoid of the usual trips across the country or lavish family dinners, as China pledged to fight any criticism of its uncompromising “zero-Covid” policy.  The long break is usually one of the most lucrative times of the year for restaurants, hotels and other businesses in China. This year, travellers spent 43% less than in 2021, data showed on Thursday. It was the latest sign of the pain caused by Covid curbs imposed on dozens of major population centres across the country, including the strict city-wide lockdown the commercial hub of Shanghai has endured for more than a month. Authorities in Beijing, which has already closed restaurants and gyms and other public venues and locked down some residential buildings, want to avoid going down a similar path. The capital’s streets were less hectic than on a normal working day as officials encouraged people to work from home and scores of bus and subway routes were closed. “Right now, I feel relatively safe at work and where I live, but I don’t dare to run around outside because I still feel the outbreak hasn’t reached its peak,” said cook Liu Wentao. Beijing is doing better two weeks into its outbreak than Shanghai did at that point, when daily cases were in the hundreds and rising. But China’s attempts to eliminate Covid, at odds with the rest of the world which is opening up and trying to live with the disease, have prompted rare public criticism at home. “Shanghai has fallen,” Hu Xijin, former editor-in-chief of the state-backed nationalist tabloid Global Times, said on the Twitter-like Weibo. Beijing has to either find less costly ways of tackling its outbreak or “to tell the whole Chinese society the truth” that disruptive consequences cannot be avoided, he said. “The former requires wisdom, the latter courage.” The post was swiftly removed. Hu did not respond to a Reuters request for comment sent to his Weibo account. Following a meeting of the country’s highest decision-making body, state television reported that China “will resolutely fight any comments and actions that distort, doubt and repudiate our country’s anti-epidemic policies”. Relaxing Covid controls would lead to large-scale infections, state television said. It was not clear if the comments were related to Hu’s post, although many Weibo users drew a link. The policy taken by China, where the virus was first identified in the city of Wuhan in late 2019, threatens its official growth target of around 5.5% this year and reverberations across the global economy and trade. Global supply chains are heavily reliant on Chinese manufacturers, whose workers are often not allowed to leave their locked-down homes. Large international consumer brands have invested heavily in China in recent years to penetrate a market abundant in voracious spenders. The European Chamber of Commerce in China said EU firms were increasingly looking to move their investments to other markets. Chinese markets have stabilised recently around two-year lows, but investor sentiment is increasingly running on hopes for policy support from the central bank and other regulators. China argues its Covid policy is saving lives, which makes the heavy economic and psychological costs of lockdowns worth it, though top officials have pledged to help businesses ride the storm. A Shanghai official said that authorities had found it difficult to strike the correct balance between curbing infections and allowing firms to resume operations. “Some companies have reported ... that the standards for resuming work are somewhat high,” said Zhang Hongtao, of the city’s economy and information technology commission.

The Chinese capital Beijing shut dozens of metro stations and bus routes yesterday in its campaign to stop the spread of Covidd-19 and avoid the fate of Shanghai where millions of residents have been under strict lockdown for more than a month. China’s uncompromising battle against the coronavirus, which is believed to have emerged in Wuhan city in late 2019, is undermining its growth and hurting the international companies invested there, according to the latest forecasts and data. The central city of Zhengzhou, home to 12.6mn people and a factory of Apple’s iPhone manufacturer Foxconn, announced work-from-home and other Covid curbs for the coming week late on Tuesday, joining dozens of big cities under some form of lockdown. The capital shut more than 60 subway stations, about 15% of the network, and 158 bus routes, service providers said. Most of the suspended stations and routes are in the Chaoyang district, the epicentre of Beijing’s outbreak. With dozens of new cases a day, Beijing is trying to avoid a full lockdown, as Shanghai also did initially, instead hoping that mass testing will find and isolate the virus before it spreads. The city of 22mn people has closed schools, restaurants, gyms and entertainment venues, as well as some businesses and residential buildings in high-risk areas. In what will be a worrying sign for Beijing residents, workers in protective gear were seen setting up a two-metre high blue metal wall around a residential complex, with a sign at the gate reading “Entry only. No exit.” Twelve out of 16 Beijing districts conducted the second of three rounds of tests this week, having done three screenings last week. In Shanghai, there’s no end in sight for the lockdown. After more than a month, most people in mainland China’s biggest city are still not allowed to leave their housing compounds. Some residents have benefited from a tentative easing of precautions since Sunday, with usually just one member of a household allowed out for a quick stroll and grocery shopping. The latest data showed Shanghai found 63 new cases outside areas under the strictest curbs, suggesting it has a way to go before reaching the goal of no cases for several days for curbs to ease significantly. The isolation has fuelled rare outbursts of discontent, with social media users playing a cat-and-mouse game with censors to keep evidence of the hardship circulating. Some have turned to blockchain technology to protect videos, photos and artwork around the topic from deletion. Such acts of defiance are awkward for the ruling Communist Party in a sensitive year in which President Xi Jinping is expected to secure a third leadership term. Authorities say the zero-Covid policy aims to save as many lives as possible, pointing to the millions of Covid deaths outside China, where many countries are throwing off precautions to “live with Covid” even as infections spread. But the policy is hurting domestic consumption and factory output, disrupting key global supply chains and shrinking revenues for some of the biggest international brands, such as Apple, Gucci-parent Kering and Taco Bell-owner Yum China. Capital Economics estimates Covid has spread to areas generating 40% of China’s output and 80% of its exports. “Recent mobility trends suggest that China’s growth momentum deteriorated significantly in April, with traffic congestion, subway passenger volume and other high-frequency indicators at their weakest since...early 2020,” Fitch Ratings said in a note. Fitch cut its 2022 growth forecast to 4.3%, from 4.8%, well below China’s official 5.5% target. Starbucks Corporation said its sales in China, where the chain has rapidly expanded in recent years, declined 23%, overshadowing 12% growth in North America. Foxconn said on Wednesday it was continuing production in Zhengzhou. Numerous factories were shut after Shanghai went into lockdown from March. While some have started reopening, getting workers back, while dealing with snarled supply chains, has proven difficult. Shanghai authorities helped Tesla transport over 6,000 workers and carry out disinfection work to reopen its factory last month, according to a letter that Tesla sent to officials. In Shanghai’s Lingang free trade zone area, 252 firms, or 52% of the companies there, had resumed work as of May 3, the Xinhua news agency reported. Authorities were subsidising the screening of workers for Covid, providing hundreds of millions of yuan in relief on rent, and assigning officials to help implement Covid measures, it said.

Some of Shanghai’s 25mn people yesterday managed to get out for short walks and shopping after enduring more than a month under a Covid-19 lockdown, while China’s capital, Beijing, focused on mass tests and said it would keep schools closed. Beijing is desperate to prevent an outbreak now numbering in the dozens of new cases a day from spiralling into a crisis like the one in Shanghai. Most people in the financial hub of Shanghai are still unable to leave their homes after more than a month of confinement. But a gradual easing of curbs in five of its 16 districts from Sunday, home to about a fifth of the city’s population, allowed some to get out briefly. An undated video circulating on social media yesterday showed an elderly man stopping a vehicle, saying “Shanghainese, starving!”. The man began crying after the driver offered him bananas and biscuits. Reuters could not verify the authenticity of the clip. Other social media posts showed residents strolling in the suburbs, or queuing up at supermarkets that had been allowed to reopen. One picture showed two women carrying a pole with four bulky bags of groceries on their shoulders. The level of the restrictions varied from one residential complex to another. In many compounds, a single person from each household could go out at a time, for a maximum three hours. It is not clear if Shanghai is turning a corner in its campaign against the virus. The number of new cases outside areas under the strictest precautions was up to 73 on Monday from 58 the day before — a setback after two consecutive days of no cases. A period of no new cases is a key condition for a more significant relaxation of curbs. The coronavirus first emerged in the Chinese city of Wuhan in late 2019 and for two years authorities managed to keep outbreaks largely under control with lockdowns and travel bans. But the fast-spreading Omicron variant has tested China’s “zero-Covid” policy, inflicted a significant human and economic cost and stirred rare public anger in a sensitive year for President Xi Jinping, who is expected to secure a precedent-breaking third leadership term this autumn. Dozens of major Chinese cities are in full or partial lockdown. The latest was the central city of Zhengzhou, home to 12.6mn people and a factory of Apple’s iPhone manufacturer Foxconn. The city announced yesterday it would impose new Covid-related movement curbs for May 4-10. Consumers stuck indoors are not spending, while data on Saturday showed factory activity contracting sharply in April. Authorities say the zero-Covid policy aims to save as many lives as possible, pointing to the millions of Covid deaths outside China, where many countries are throwing off precautions to “live with Covid” even as infections spread. China reported 20 new Covid deaths on Monday, all in Shanghai, taking the total to 5,112 since the pandemic began, although there have been some doubts over the counting. Beijing, hoping to avoid Shanghai’s anguish, is banking on mass testing to find and isolate infections, as well as targeted closures of businesses and residential buildings. The capital of 22mn people will keep schools shut for at least another week after the five-day Labour Day holiday that runs through Wednesday, said Li Yi, a municipal education commission spokesman. From Thursday, people coming or leaving Beijing will also need to show proof of a negative Covid test no older than 48 hours. City officials have urged residents to wear masks properly and wash their hands when using public toilets after 40 infections were traced to a person who used such facilities three times. Twelve out of 16 Beijing districts are conducting a further three rounds of Covid tests this week, following three rounds of screening last week. Restaurants have been closed for dining in during what is usually a busy holiday period and city streets are unusually quiet as many people fear being sent to quarantine if found to have been close to a Covid case.