China has rushed to contain new Covid cases across the country

Workers in Shanghai’s Changning District erect a fence around the neighborhood on October 7, 2022, after reports of new Covid cases.

Hector Retamal | Afp | Good pictures

BEIJING – New Covid cases are on the rise across mainland China, prompting many local authorities to tighten restrictions on movement.

According to Nomura’s model, around 4.8% of China’s GDP as of Monday has been negatively affected by the Covid restrictions. That’s up 4.3% from a week ago.

According to official announcements, Shanghai ordered the temporary closure of entertainment venues such as Internet cafes on Monday in three cities.

On Tuesday, several schools in the central Chinese city of Xi’an canceled in-person classes for most students, a local news agency reported. A hashtag about the sudden closures was trending on Weibo, China’s Twitter-like social media platform.

Xi’an’s education department did not immediately respond to a CNBC request for comment.

The measures follow a week-long National Day holiday that ended Friday, during which “China’s overall Covid situation appears to have materially worsened,” Nomura’s chief China economist Ding Lu and a team said in a note on Monday.

The report pointed to a popular tourist city in southern Yunnan province that has been on lockdown since Oct. 4, Xinjiang’s ban on leaving the region due to local Covid outbreaks, and a lockdown on Oct. 6 in Haikou, Hainan province.

The seven-day moving average of domestically transmitted Covid infections with symptoms more than doubled from 136 on Oct. 1 to 305 on Oct. 9, analysts at Nomura said.

More than 20 provincial-level regions of the country reported 427 new symptomatic Covid cases on Monday. When infections without symptoms are included, the daily case count exceeds 2,000 and comes from nearly 31 province-wide regions.

Domestic tourism revenue during this month’s holiday — China’s last public holiday of the year — came in at 287.21 billion yuan ($40.45 billion), according to China’s Ministry of Culture and Tourism. This was down from last year and below 2019, the ministry said.

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However, online booking site Trip.com said nearly two-thirds of vacation orders were for nearby trips or accommodations, for which spending increased 30% year-over-year.

Strict virus testing requirements and the risk of not being able to return home have discouraged long-distance domestic travel over the mainland.

That contrasts with a surge in overseas travel as Hong Kong, Taiwan, Japan and South Korea join other countries in easing quarantine and virus testing rules.

Sticking with zero-covid

This October is a very important time politically for China’s president Xi Jinping He is expected to strengthen his power in A key meeting of the ruling Chinese Communist Party is next week.

Ahead of that conference, central government officials confirmed their dynamic zero-covid policy in an article on Monday in the party’s newspaper, the People’s Daily.

State broadcaster CCTV summed up the article in its nightly news program by stressing the need for a more targeted approach to curbing Covid.

“We need to be vigilant against the spread of the epidemic, with paralyzing thinking, war weariness, the attitude of taking chances and the attitude of taking it easy – and conscientiously carry out the task of preventing and controlling the epidemic,” the broadcaster said. In Chinese CNBC translation.

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