China battles karaoke COVID cluster in Shanghai among other outbreaks

By Brenda Goh and Roxanne Liu

SHANGHAI/BEIJING (Reuters) -China is fighting nascent COVID-19 flare-ups across the country with mass testing and fresh restrictions, including in weary Shanghai where new cases have been linked to a building which houses a karaoke lounge that was operating illegally.

Pressure is mounting on officials to avert a wider spread and disruptions similar to the painful and costly isolation that Shanghai, China’s most populous city, suffered in April and May. Those business disruptions rippled across the global economy.

“Several Chinese areas are facing local outbreaks and infections have emerged at the community level in Shanghai,” city health official Zhao Dandan told reporters on Wednesday.

“There should be no slacking,” Zhao said.

While the latest daily caseload of just over 300 infections is insignificant by global standards, the officials’ reaction shows China’s firm commitment to its policy to eradicate all outbreaks.

However, fears that further lockdowns to control the spread of the disease could curb activity in the world’s second-largest economy weighed on Chinese stocks, and financial markets worldwide.

China is the only major economy digging in its heels on a “zero-COVID” policy aimed at promptly eradicating all outbreaks, while the rest of the world tries to co-exist with the virus.

Shanghai listed 26 addresses of buildings under lockdown on Wednesday, taking the total to 31. One COVID case was suspected in one of the iconic International Financial Centre twin towers, and office workers on two floors have been taken to quarantine as close contacts, according to staff in the building.

The commercial hub of 25 million people reported 24 new cases for Tuesday versus Monday’s eight. It is testing all residents in nine of its 16 districts, and some from other areas, from Tuesday to Thursday.

Shanghai already requires residents to get tested frequently in order to enter shopping malls or take public transport. Authorities have suspended operations of karaoke lounges, but other recently-reopened cultural venues such as libraries will stay open. Cinemas are due to reopen on Friday.

‘WAR-TIME’

Beijing, which reported three new cases on Wednesday as of 3 pm, urged transport hubs and hotels to check the body temperature of visitors and proof of negative COVID test results. From July 11, only vaccinated Beijing residents can enter crowded venues, officials said.

The caseload in the eastern Anhui province, where more than 1 million people in small towns are under lockdown, dipped to 222 on Tuesday from 231 a day before. The province still accounts for most of China’s new infections.

In the northwestern city of Xian in the Shaanxi province, a seven-day closure of various entertainment venues and suspension of dining-in at restaurants went into effect on Wednesday. The city of 13 million detected 11 new cases on Tuesday.

Xian, famed for its Terracota Army, is the first major Chinese city to declare a fight against the BA.5.2 subvariant of the contagious Omicron COVID variant, seen as more infectious than the BA.2 subvariant found in earlier outbreaks in China.

Shaanxi governor Zhao Yide said the province’s cities should enter a “war-time” state and ramp up screening of travellers.

In the eastern Jiangsu province, 65 new cases were detected on Tuesday. The Chinese Athletics Association has cancelled the November 2022 World Athletics Half-Marathon Championship that was scheduled to be held in the province, in Yangzhou.

‘UNIMAGINABLE’ CONSEQUENCES

President Xi Jinping, widely expected to secure a precedent-breaking third leadership term later this year, reiterated the country’s “dynamic zero-COVID” policy on a visit last week to the city of Wuhan, where COVID was first reported.

Xi said it was better to incur “temporary” economic costs than to endanger lives and that accepting COVID as endemic would have “unimaginable” consequences in China.

Officials have pointed to the millions of COVID-linked deaths around the world, versus the 5,226 reported in China.

Minsheng Bank estimates China’s economy grew around 0.5% year-on-year in the second quarter, versus 4.8% in the first, weighed down by extensive lockdowns. The data is due next week.

The economy still faces a subdued property market, soft consumer spending, and businesses reluctant to hire and invest due to COVID uncertainty.

China will soon set up a 500 billion yuan ($74.69 billion) state infrastructure fund to revive the economy, Reuters exclusively reported on Tuesday.

(Reporting by Roxanne Liu, Ryan Woo, Ella Cao, Brenda Goh, Winni Zhou, Engen Tham and Shanghai newsroom; writing by Roxanne Liu and Marius Zaharia; Editing by Jacqueline Wong, Himani Sarkar and Kim Coghill)