BEIJING – Shanghai allowed an additional 4 million people out of their homes on Wednesday as antivirus controls that shut down China’s biggest city eased, while the International Monetary Fund cut its forecast for Chinese economic growth and warned that the global flow of industrial goods may be disrupted.
A total of nearly 12 million people in the city of 25 million are allowed to go outside after the first round of easing last week, health official Wu Ganyu told a news conference. Wu said the virus was “under effective control” for the first time in some parts of the city.
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Under the latest changes, more than 4 million people are included in areas where the status has changed from closed to controlled, Wu said. He said some are not allowed to leave their neighborhoods and large gatherings are prohibited.
Meanwhile, the IMF lowered its forecast for Chinese growth this year from 4.8% to 4.4% due to shutdowns in Shanghai and other industrial centers. That’s nearly half of last year’s 8.1 percent growth and below the Communist Party’s target of 5.5 percent.
China’s case numbers in its latest outbreak of infection are relatively low, but the ruling party is applying a “zero-Covid” strategy that has closed major cities to isolate all cases.
As of Wednesday, the government reported 19,927 new cases on the Chinese mainland, of which 2,761 had no symptoms. Shanghai accounted for 95% of the total, or 18,902 cases, of which 2,495 had symptoms.
The Shanghai city health agency said seven people who had Covid-19 died on Tuesday, but said the deaths were caused by cancer, heart disease and other illnesses. All but two were over 60 years old.
Shanghai closed businesses and confined most of its population to their homes from March 28, following a spike in infections. This has led to complaints about lack of access to food and medicine supplies. People in Shanghai who test positive but show no symptoms have been ordered to quarantine centers set up in exhibition halls and other public buildings.
Official data this week showed that economic growth in the first three months of this year fell compared to the last quarter of 2021.
The lockdowns in China “will likely exacerbate supply disruptions elsewhere” and could add to pressure for inflation to rise, the IMF said in a report.
The ruling party has promised tax refunds and other business aid but is avoiding large-scale stimulus spending. Economists say the strategy will take longer to show results and Beijing may need to spend more or cut interest rates.
Chinese leaders have vowed to try to reduce the human and economic cost of disease controls by shifting to a “dynamic cleaning” strategy that isolates neighborhoods and other smaller areas rather than entire cities. However, many areas appear to be enforcing stricter controls after Shanghai officials were criticized for not acting aggressively enough.