China’s COVID epicentre shifts to Guangzhou as outbreaks widen

  • Southern manufacturing center faces worst COVID-19 outbreak
  • In Zhengzhou, the manufacturing base of the Apple supplier is twice as large
  • China shares, currency exchange rate due to virus threat

BEIJING, Nov 8 (Reuters) – Cases of the new coronavirus surged in Guangzhou and other Chinese cities, officials said on Tuesday, making the global manufacturing hub China’s latest COVID-19 epicenter and testing the city’s ability to escape a Shanghai-style lockdown.

New local infections across the country reached 7,475 on Nov. 7, up from 5,496 the previous day and the highest since May 1, according to China’s health authority. About a third of the new infections were in Guangzhou.

The increase was modest by global standards, but significant for China, where outbreaks must be quickly eradicated under its zero-covid policy. Economically important cities, including the capital Beijing, are demanding more PCR tests for residents, in some cases locking down neighborhoods and even districts.

The sharp rise will test China’s ability to keep its COVID measures surgical and targeted and could dampen investors’ hopes that the world’s second-largest economy will soon ease restrictions and restrictions.

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“We’re seeing a play between the easing of controls and a heightened voice for the rapid spread of COVID cases,” said Ni Wen, an economist at Hwabao Trust in Shanghai.

Given how nationwide COVID restrictions have hit domestic consumption, Ni said he cut his fourth-quarter economic growth forecast to 3.5% from 4%-4.5%. In July-September, the economy grew by 3.9%.

China’s stock markets saw an uptick in workload on Tuesday, but shares have yet to give up last week’s big gains.

Investors see China’s battered markets as an attractive prospect as the global slowdown deepens and the details of gradual change, such as targeted lockdowns and progress in vaccination rates, remain elusive.

“No matter how strict the letter of the law is … there is some relaxation,” said Damien Boey, chief macro strategist at Australian investment bank Barrenjoy.

NO COMPLETE DISTRIBUTION YET

Guangzhou, capital of Guangdong province, reported 2,377 new local cases as of Nov. 7, up from 1,971 the previous day. That was a sharp jump from the double-digit increase two weeks ago.

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A surge in cases in the sprawling southern city dubbed the “factory floor of the world” means Guangzhou has overtaken Inner Mongolia’s northern city of Hohhot to become China’s COVID epicenter.

Many districts in Guangzhou, including central Haizhou, have imposed varying degrees of restrictions and barriers. However, so far, the city has not imposed the same lockdown as Shanghai did earlier this year.

Shanghai is currently not facing a resurgence of COVID, and was placed on lockdown in April and May after several thousand new infections were reported daily in the last week of March.

“We have been working from home for the past two days,” said Aaron Xu, who runs the company in Guangzhou.

“So far, only a few associations have been closed. Mostly, we’re seeing complex security disruptions, suspending public transit services, banning couriers and food deliveries. And we have to run PCR tests every day.”

PROVIDED CASES

In Beijing, authorities identified 64 new local infections, a small number compared to Guangzhou and Zhengzhou, but enough for many of its residents to trigger a new outbreak of PCR tests and lock down more buildings and neighborhoods.

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“The lockdown situation across the country continued to deteriorate rapidly last week, with our China COVID Lockdown Index rising to 12.2% of China’s GDP from 9.5% last Monday,” Nomura wrote in a note on Monday.

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 as of Nov. 7, more than double the previous day.

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

In Inner Mongolia’s coal-producing region, the city of Hohhot reported 1,760 new local cases as of Nov. 7, up from 1,013 a day earlier.

Reports by Ryan Wu, Bernard Orr, Liz Li, and Jing Wang; Additional reporting by Josh Yeh in Hong Kong and Tom Westbrook in Singapore; Edited by Raju Gopalakrishnan, Stephen Coates, and Raissa Kasolowski

Our standards: Thomson Reuters Trust Principles.

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