China signals slight easing of Covid policy, no major changes

Customers dine at a McDonald’s in Guangzhou on December 1, 2022, a day after the city eased Covid restrictions on restaurant operations.

Yin Hon Chow | CNBC

BEIJING — A trickle of changes around China’s Covid controls over the past 24 hours has raised hopes that a broader easing is on the way.

Reports and anecdotes from local state media said on Thursday that some people who tested positive for Covid-19 in Beijing may now be allowed to quarantine at home instead of being sent to a centralized facility. It was unclear to what extent these changes applied.

At the central government level, a notable development is the official language downplaying the severity of the Omicron variant.

Vice Premier Sun Chunlan told a meeting on Wednesday that China faces a new Covid situation “as the pathogenic nature of the Omicron variant weakens, vaccination becomes more common and [there’s] an accumulation of experience with Covid prevention and control.” This is according to a CNBC translation of the Chinese state media report late last night.

Also on Wednesday, Guangzhou city’s hardest-hit Covid district said it would allow most restaurants to resume in-store dining and entertainment venues could gradually reopen.

“We believe Sun’s speech, in addition to the notable easing of Covid control measures in Guangzhou yesterday, sends another strong signal that the zero-Covid policy will end in the coming months,” the economist said. Nomura’s China Chief, Ting Lu, and a team. in a report Thursday.

“However, restrictions and lockdowns may not really ease until March 2023 due to a likely increase in Covid cases and disruptions, as the current narrative that Omicron is still very deadly has not yet changed for the majority of Chinese people, especially those in less-developed regions,” the report said.

Sun’s description of Omicron follows a comment Tuesday by a Chinese official, citing overseas research, that the share of severe cases and deaths due to the Omicron variant is significantly lower than that of previous variants.

Previously, Sun was one of the toughest voices facing the public on Covid control.

The country’s overall policy and position has hardly changed in name, with the emphasis on more targeted rather than rapid checks.

The daily number of Covid cases in mainland China for Wednesday hit a new high of more than 41,000, including asymptomatic infections. But the number of new infections in Guangdong province has fallen slightly, although it still numbers in the thousands.

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Parts of the provincial capital of Guangzhou and the national capital of Beijing said this week that people mostly staying at home did not need to take regular virus tests. Public places in Beijing still require proof of a negative virus test from the past 48 hours for entry.

China’s strict Covid controls initially helped the country return to growth in 2020.

But after the more contagious variant of Omicron emerged, local authorities tried to control outbreaks with tougher measures, leading to a two-month lockdown in Shanghai that dampened growth in the second quarter.

Business surveys for November released this week showed an overall contraction in factory activity.

Over the weekend, students and groups of people staged public protests across the country to protest against zero-Covid policy. A resurgence of local infections and extreme controls have added to the frustrations accumulated over more than two years.

Almost three weeks ago, China announced new measures that have reduced quarantine times, among other changes.

Why China shows no signs of backing down from its strategy

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