China reports a slight easing of Covid policy, without any major change

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

Yin Hun Chau | CNBC

BEIJING – A series of changes around China’s Covid controls in the past 24 hours have raised hopes that a broader relaxation is on its way.

Local state media reports and anecdotes on Thursday indicated that some people who test positive for Covid-19 in Beijing may now be allowed to quarantine at home instead of being sent to a central facility. It is not clear to what extent these changes apply.

At the central government level, one notable development has been official language downplaying the severity of the Omicron variant.

China is facing a new COVID-19 situation “with the pathogenic nature of the Omicron variant weakening, vaccination becoming more popular and [there’s] Accumulating experience in the prevention and control of Covid.” This is according to CNBC’s translation of a Chinese state media report late last night.

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

“We believe that Sun’s speech, combined with the marked easing of anti-Covid measures in Guangzhou yesterday, sends another strong signal that the zero-Covid policy will end within the next few months,” said Ting Lu, chief China economist at Nomura and the team. In Thursday’s report.

“However, restrictions and lockdowns may not really moderate before March 2023 due to a potential spike in Covid case numbers and disruption, as the current narrative that Omicron is still very lethal remains unchanged for the majority of Chinese, especially those in less developed regions.” .

China's easing of some Covid restrictions has caused stocks to rally in the short term, a research firm said

Sun’s description of Omicron follows a comment made on Tuesday by a Chinese official, citing outside research, that the proportion of severe cases and deaths from the Omicron variant is clearly lower than previous variants.

Previously, Sun has been one of the toughest public-facing voices on Covid.

There has been little change in the country’s general policy and stance, with an emphasis on making controls more targeted than comprehensive.

The number of COVID-19 cases in mainland China on Wednesday rose to a new record of more than 41,000, including asymptomatic infections. But the number of new infections in Guangdong province has decreased slightly, although it still numbered several thousand.

Read more about China from the CNBC Pro

Parts of the provincial capital Guangzhou and the national capital Beijing said this week that people who mainly stay home do not need to take regular virus tests. Public spaces in Beijing still require proof of a negative virus test in the past 48 hours in order to enter.

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

But after the more contagious Omicron variant emerged, local authorities tried to control the outbreak with tougher measures, locking down Shanghai for two months and dampening growth in the second quarter.

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

Over the weekend, students and groups of people organized public demonstrations across the country Protesting the zero covid policy. An increase in local infections and tight control led to frustration accumulated over more than two years.

Nearly three weeks ago, China announced New measures cut quarantine times, Among other changes.

Why China shows no sign of backing down from its strategy

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