Passengers wait to board a train at Hongqiao railway station in Shanghai on December 6, 2022.
Hector Retamal | Afp | Getty Images
BEIJING — As mainland China relaxes a lot of its stringent Covid controls, analysts indicate the country is removed from a fast return to a pre-pandemic situation.
National authorities announced sweeping changes on Wednesday to make it easier to travel domestically, keep businesses operating and permit Covid patients to quarantine at home.
“These measures are much welcome for an economy that has been severely battered this 12 months,” Nomura’s chief China economist Ting Lu and a team said in a report.
“Nevertheless, we’d also caution that the road to full reopening should still be gradual, painful and bumpy,” they said. The country doesn’t appear well prepared for an enormous wave of infections, and the infection rate of 0.13% leaves the country far below that needed for herd immunity, based on the report.
Mainland China’s every day Covid infections, mostly asymptomatic, surged to a record high above 40,000 in late November. The number has since tapered off as cities reduced virus testing requirements.
The trail forward for China to reopen may take a couple of months, with a surge in infections likely, based on a Goldman Sachs report on Dec. 4.
“With a lot of the population uninfected before reopening, lower elderly vaccination rates than many other economies, and cultural similarities, we expect Hong Kong and Taiwan’s reopenings are most relevant for Mainland China,” said chief China economist Hui Shan and a team.
“Their experiences suggest that cases are prone to skyrocket upon reopening and linger for some time, a high elderly vaccination rate is vital to a secure reopening, and mobility declines sharply as cases rise,” the Goldman report said.
Within the last two months, Taiwan now not required international travelers to quarantine upon arrival, and said people didn’t need to wear masks outdoors.
60% of individuals may get Covid
Last week, mainland Chinese authorities announced one other push to vaccinate the country’s elderly.
Within the near term, about 60% of individuals may get infected, no matter how policy is adjusted, Feng Zijian, former deputy director of China’s Center for Disease Control and Prevention, said Tuesday during a Tsinghua University talk. He said that figure could ultimately climb to 80% or 90%.
Recent measures released by the health commission Thursday focused on tips on how to treat Covid patients at home, and included a listing of medicines.
Whether out of necessity or precaution, local demand for related medication was already on the rise.
JD Health said online sales have climbed for cold medicines, fever-reducing drugs and related products. The corporate said its latest data showed transaction volume for the week ended Monday surged by 18 times versus October.
Looking ahead, it’s pretty clear that China’s Covid policy is about to cross a turning point, said Bruce Pang, chief economist and head of research for Greater China at JLL.
As of Wednesday, negative virus tests are not any longer needed to travel inside China, while large numbers of individuals typically travel across the upcoming Lunar Recent Yr holiday, he said. Which means there could also be a surge in Covid infections, and China’s policy won’t ever return, Pang said.
Chinese travel booking site Trip.com said after the relief in domestic travel policies, flight ticket searches for the Lunar Recent Yr, which falls in late January 2023, surged to the very best in three years.
Not a full reopening, yet
Health authorities emphasized Wednesday the most recent changes don’t imply a full reopening. There was no reduction in quarantine time for international travelers, and the measures include instances during which a negative virus test continues to be required.
At a neighborhood level, Beijing city said Wednesday evening that folks wanting to dine in at restaurants would still need to indicate a negative virus test from throughout the last two days.
Nevertheless it’s taking longer to process virus test results attributable to a rise in positive cases, local Beijing media reported Wednesday, citing a virus testing firm employee. Since virus tests are done in batches of 10, if one person’s result seems positive, the machine must process additional tests, the report said.
Goldman Sachs analysts expect China’s reopening — defined as a shift away from lockdowns — to are available in the second quarter of 2023, based on a separate report on Wednesday.
“An earlier-than-expected reopening would add more downward pressure to near-term growth but moderate upside risk to our 2023 full-year GDP growth forecast,” the analysts said.
They expect any initial reopening to create a drag on the economy “attributable to surging infections, a short lived shortage of labor supply and increased supply chain disruptions.”
Goldman forecasts 3% growth for China’s economy this 12 months, and 4.5% in 2023.
