China’s COVID epicentre shifts to Guangzhou, more lockdowns loom

  • A southern manufacturing hub battling the worst of the COVID-19 outbreak
  • Cases are doubling in Zhengzhou, a manufacturing base for an Apple supplier
  • Chinese stocks, currency fall on virus fears

BEIJING, Nov 8 (Reuters) – New coronavirus cases surged in Guangzhou and other Chinese cities, official data showed on Tuesday, as the global manufacturing hub became China’s latest epicenter of COVID-19 and tested the city’s ability to avoid Shanghai-style gridlock.

Nationally, new locally transmitted infections rose to 7,475 on Nov. 7, according to Chinese health authorities, up from 5,496 the previous day and the highest level since May 1. Guangzhou accounts for nearly a third of the new infections.

The increase was modest by global standards, but significant for China, where outbreaks are dealt with quickly when they occur. Economically vital cities, including the capital Beijing, are requiring more PCR tests for residents and locking down neighborhoods and even districts in some cases.

The sharp recovery will test China’s ability to keep its measures against COVID surgical and targeted, and raise investor expectations that the world’s second-largest economy may soon reopen its borders or even abandon its zero-tolerance approach .

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The yuan weakened against the dollar and Chinese stocks fell on Tuesday as a rising number of COVID cases undermined optimism about the reopening of China’s borders, closed to most visitors, including tourists, since 2020.

Guangzhou, the capital of Guangdong province, reported 2,377 new local cases for November 7, up from 1,971 the previous day. That was a dramatic jump from double-digit increases two weeks ago.

As cases surge, the sprawling southern city dubbed the “factory of the world” has overtaken the northern Inner Mongolia city of Hohhot as China’s current epicenter of COVID, in its most serious outbreak to date.

Many areas of Guangzhou, including central Haiju, imposed varying levels of restrictions and lockdowns. But Guangzhou has so far resisted a blanket lockdown like the one in Shanghai earlier this year.

Shanghai, which is not currently facing a resurgence of COVID, went into lockdown in April and May after reporting several thousand new infections each day in the last week of March.

“For the past few days, we have been working from home,” said Aaron Xu, who runs a company in Guangzhou.

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“Only a few complexes have been locked so far. We are mostly seeing disruptions in the form of suspension of public transport services and complex security banning couriers and food delivery. And we have to do PCR tests every day.”

OTHER CITIES

Elsewhere in Guangdong province, the country’s biggest air show kicked off on Tuesday in Zhuhai, with some attendees and delegates suddenly locked out of the event due to COVID measures amid rising cases in the coastal city.

Zhengzhou, the capital of central Henan province and a major manufacturing base for Apple ( AAPL.O ) supplier Foxconn ( 2317.TW ), reported 733 new local cases on Nov. 7, more than doubling from a day earlier.

In Beijing, authorities found 64 new local infections, a small increase compared to Guangzhou and Zhengzhou, but enough to prompt a new outbreak of PCR tests for many of its residents and the lockdown of more buildings and neighborhoods.

“The lockdown situation continued to deteriorate rapidly across the country over the past week, with our domestic China COVID lockdown index rising to 12.2% of China’s total GDP from 9.5% last Monday,” Nomura wrote in note on monday.

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“We continue to believe that while Beijing may refine some of its COVID measures in the coming weeks, these fine-tuning measures may be more than offset by the tightening of the Zero COVID strategy by local authorities.”

In the southwestern metropolis of Chongqing, the city reported 281 new local cases, more than double the 120 a day earlier.

Authorities in Chongqing have imposed new area restrictions in at least four districts, closing down some karaoke lounges, dance halls and entertainment venues, in a situation that a local official described as “complex and severe”.

In the coal-producing region of Inner Mongolia, the city of Hohhot reported 1,760 new local cases for Nov. 7, up from a trend of 1,013 the day before.

Reporting by Ryan Wu, Bernard Orr, Liz Lee, Jing Wang and Josh Yeh; Editing by Raju Gopalakrishnan and Stephen Coates

Our standards: The Thomson Reuters Trust Principles.

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