Pandemic in China: Anti-COVID rules ease; IMF downgrades economic forecast

BEIJING — Shanghai allowed 4 million more people out of their homes on Wednesday as virus controls that shut down China’s biggest city eased, while the International Monetary Fund cut its forecast for China’s economic growth and warned that the global flow of industrial goods could be disrupted.

In total, nearly 12 million people in the city of 25 million are allowed outside following the first round of easing last week, health official Wu Ganyu told a conference in hurry. Wu said the virus was “under effective control” for the first time in parts of the city.

According to 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 banned. .

The IMF cut its Chinese growth forecast this year to 4.4% from 4.8% due to shutdowns in Shanghai and other industrial hubs. That’s nearly half of last year’s 8.1% growth and below the ruling Communist Party’s 5.5% target.

China’s case count during its last surge of infections is relatively low, but the ruling party is enforcing a “zero-COVID” strategy that shut down major cities to isolate each case.

On Wednesday, the government reported 19,927 new cases in mainland China, of which all but 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 reported that seven people with COVID-19 had died on Tuesday, but said the deaths were due to cancer, heart disease and other conditions. All but two were over 60 years old.

Shanghai closed businesses and confined most of its population to their homes from March 28 after 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 placed in 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 declined compared to the last quarter of 2021.

Lockdowns in China will “likely worsen supply disruptions elsewhere” and could add 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 produce 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 moving to a “dynamic cleaning” strategy that isolates neighborhoods and other smaller areas instead of entire cities. However, many areas appear to be applying tougher controls after Shanghai officials were criticized for not acting aggressively enough.