Covid outbreak worsens in south China’s city of Guangzhou

BEIJING — Covid infections are rising in the capital of China’s export-heavy province of Guangdong, raising fears of another drag on the national economy.

Schools in eight of Guangzhou city’s 11 districts moved classes online for most students from Thursday. Over the past few days, more parts of the city have ordered people to stay home and non-essential businesses to close.

“As things stand, it’s hard to say whether Guangzhou will repeat Shanghai’s experience in the spring of this year,” Nomura China chief economist Ting Lu and a team said Wednesday. “If Guangzhou repeats what Shanghai did in the spring, it will lead to a new cycle of pessimism about China.”

Earlier this year, metropolitan Shanghai was shut down for around two months and wider Covid controls led to second-quarter national GDP growing just 0.4%, official figures showed. GDP rebounded in the third quarter with growth of 3.9%, but exports then fell unexpectedly in October.

It was not immediately clear to what extent Guangzhou’s latest trade restrictions affected the factories’ ability to operate. Many manufacturers are located outside the city, but in the same province.

State-owned automaker GAC Group said its builders in Guangzhou were operating normally on Thursday morning. “The outbreak has not had a substantial impact,” the company said in a statement.

In just one week, the number of Covid infections with symptoms in Guangdong jumped fivefold to 500 on Wednesday. During this period, infections without symptoms increased sevenfold to around 2,500 cases.

The latest outbreak prompted the American Chamber of Commerce in China to postpone an event in Guangzhou, which had already been postponed from September, chamber president Michael Hart said Thursday. He expects two more chamber events in the city this year to be postponed.

“These travel impacts are hurting the ability of local governments to come up with investments,” Hart said, noting that those investments were not wasted but delayed.

“I’ve canceled more trips than I could take,” he said.

Late autumn is a popular time for conferences and business trips to China.

Notably, Guangzhou indefinitely delayed its auto show which was due to start next week. The country’s biggest auto show that Beijing was supposed to host earlier this year has never been postponed.

“Probably a greater concern [than getting sick] is what [travel] do to your Beijing health code and can you come back?” Hart said, referring to a government smartphone app for tracking exposure to Covid.

The city requires anyone entering a mall, taxi or public space to use the app. The venue can refuse entry if the app shows the individual has not had a negative Covid test result in the last three days – or carries a ‘pop-up window’ meant to indicate suspected contact with an infection Covid.

The pop-up window prevents people from entering Beijing.

Its appearance has become so frequent and somewhat unpredictable that a Chinese commentator said in a widely shared video that every business trip outside of Beijing was a choice between family and work. The video was removed from public view on Thursday morning.

Beijing’s health code enforcement pop-up is also affecting people’s mobility in the capital, which has reported an increasing number of infections in recent days.

“In Beijing, you just assume that a certain percentage of the workforce is going to have pop-up issues,” Hart said, noting that virus testing requirements for some office buildings have gone down to once. every 24 hours. “Instead of slacking off, it’s tightening up in some areas.”