People line up outside a fever clinic in Beijing on December 14, 2022, just days after the country eased COVID controls amid below-freezing weather in the capital.
Yuxuan Zhang | Afp | Getty Images
BEIJING — Mainland China’s rapid rollback of many Covid-related restrictions has been unexpectedly abrupt, revealing a new set of economic challenges.
In the past two weeks, local and central government authorities have eased many measures that have forced many people to stay at home and businesses to mostly work remotely. The central government said last week in particular Negative virus tests and health code checks are no longer required for domestic travel.
Meanwhile, reports of locals falling ill rose. On Sunday, the city of Beijing said, there were 22,000 visits to fever clinics — up 16 times from last week.
said Gang Yu, co-founder and CEO 111Online seller of medicines and healthcare services. This is according to CNBC’s translation of his comments in Mandarin.
Shortage of staff and medicines
Since late November, orders for fever-reducing products and related medicines have increased tenfold, Yu said in a phone interview Thursday. He said there was an “extraordinary shortage” of medicines that factories could not keep up with, a situation he expected to continue for at least another three or four weeks.
On top of the high demand, dozens of workers in 111 warehouses or offices in various parts of China have tested positive for Covid, causing an “extraordinary shortage” of staff, Yu said.
Yu said this presented a different challenge than earlier this year, when widespread Covid lockdowns meant thousands of new orders were stranded at various distribution points each day.
Delivery is still slower than usual in parts of the country.
As of Sunday, the China Post Agency said more than 400 distribution points in Beijing and other parts of the country remain closed for Covid-related reasons.
For a sense of scale, the Postal Service said Tuesday that it collects more than 360 million packages per day — more than one package per person in the United States.
We believe that the upcoming migration around the Chinese New Year holiday in late January could lead to an unprecedented spread of the COVID-19 virus and severe disruptions to the economy.
JD.com announced on Wednesday that more than 1,000 couriers from other parts of the country had arrived in the capital, Beijing. Anecdotally, in the past few days in Beijing, app-based food and grocery services that usually deliver within an hour have only done so at much longer intervals, or the next day.
Exacerbated infections may compensate for mitigation
“Over the past two weeks, the Chinese government made an abrupt 180-degree turn to end its anti-COVID policies, while completely abandoning most domestic prevention measures,” Nomura’s chief Chinese economist Ting Lu and team said in a report Thursday.
“Rising COVID cases may offset the positive impact of mitigation in the near term.”
Analysts said: “The rapid rise in the number of infections in major cities may be just the beginning of a massive wave of Covid infections.”
“We expect key activity indicators to remain weak or even decline further in December. We believe that the upcoming migration around the Chinese New Year holiday in late January could lead to an unprecedented spread of the COVID-19 virus and severe disruptions to the economy.”
China reported Thursday a Retail sales fell worse than expected In November, in addition to slowing growth in industrial production and fixed asset investment.
Get through the winter first
Social activity remains weak amid rising infections and below-freezing weather in northern cities. Traffic data from Baidu indicates that most people in large cities such as Beijing and Guangzhou have not ventured out, as congestion levels remain very low through Thursday.
Management has also tapped into Chinese travel booking site Trip.com to see how fresh domestic travel is.
“We’ve already seen a very strong sequential increase in domestic flights and hotel bookings in the last two weeks,” they said Thursday, according to a FactSet earnings call transcript.
“But in the very near term, we remain cautious because winter is usually a consistent season for both business and leisure travel,” they said.
“It may also take some time for people to get through the first wave of infections before travel demand completely releases and comes back. But we expect to see a very nice recovery and growth in the domestic travel sector next year.”
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