SHANGHAI LIFTS LOCKDOWN

On 1 June, China’s largest city, with 25 million people, began lifting its two-month anti-COVID lockdown that had trapped people in their homes and workplaces and shut the world’s busiest port.

The lockdown was ended after four days with no COVID deaths in the city and the rate of new infections at its slowest since early March.

All residents can return to work, buses and trains are running on normal schedules, and only businesses in high-risk areas still face restrictions.

Shops and restaurants can operate at 75 percent of normal occupancy.

However, to move around town, residents must show a negative PCR COVID test within the previous 72 hours.

Although officials unveiled a 50-point plan to revive the city’s economy, “any economic rebound will be limited because Beijing remains committed to its stringent COVID-19 containment policies, said economists,” The Wall Street Journal reported.

China’s official purchasing managers index (PMI) for the manufacturing sector rose to 49.6 in May, up slightly from 47.4 in April. The service sector’s PMI jumped from 41.9 in April to 47.8.

Ratings below 50 indicate economic contraction.

The PMIs’ rise toward the break-even point in May indicated that businesses expected the lockdown to be ending soon.

TREND FORECAST: China’s economic revival will run into the world’s shift from spending on stuff to spending on activities, followed by a decrease in consumer spending as the global economy slows under the weight of inflation and higher interest rates. 

With less revenue from exports, China will take measures to stimulate domestic consumption and accelerate its economic strategy of dual circulation, in which consumer spending and manufacturing for export are equally robust.