China orders Wuhan mass testing, Beijing restrictions as Covid delta spreads

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Residents of the city of Wuhan in the Chinese province of Hubei are due to take nucleic acid tests for Covid-19 on August 3, 2021.

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China is on the brink of resurgence in major cities from Beijing to Wuhan, and authorities have mass tests and widespread travel restrictions in some areas.

Daily Covid-19 cases are increasing again as the Delta variant spreads across the country.

China’s National Health Commission said it confirmed 96 Covid cases on Wednesday – 90 cases and more were reported for the third day in a row. Of the newly confirmed cases, 71 were transmitted locally, said the health commission.

Economists fear that tough government crackdowns on moves could harm the economy – the only major economy that grew last year.

“China has already shown that it is ready to take tough measures to control Covid and we have no doubt it will this time too,” said Robert Carnell, regional director of Asia-Pacific research at Dutch bank ING , in a note on Wednesday.

“Severe restrictions on movement and travel will likely produce the results we want. But the Delta variant is an especially slippery little creature, and the concern for us and many others is how quickly this will happen, and at” what the economy. ” in the meantime, “he added.

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When Covid-19 first surfaced in the country in late 2019, authorities put in place strict lockdowns and mass testing to control the nationwide outbreak.

Since then, the Chinese authorities have cracked down on all flare-ups of Covid infections. The recent spread of the more transmissible variant of Covid Delta has once again prompted authorities to tighten containment measures across the country.

State-run media agency Xinhua reported that authorities have urged people to restrict travel and avoid gatherings, and have suspended some flights, trains and long-distance bus services.

The capital Beijing imposed strict entry and exit controls on Sunday and is said to be in a “critical stage” of epidemic control after cases rose for the first time in months in late July, Xinhua reported.

The city of Wuhan, where the corona virus first appeared, will test all of its residents for new Covid cases, the news agency said.

As of July 20, Wuhan had administered more than 17 million doses of Covid vaccines, and the vaccination rate for those 18 years and over was 77.63%, according to the Wuhan City Health Commission.

“Slow patch” in China’s economy

China’s economic recovery has been mixed, with export-oriented sectors accounting for most of the growth, while domestic consumption has recovered more slowly.

The resurgence of Covid-19 infections and recent containment measures would delay a recovery in Chinese budget spending, said Sian Fenner, senior Asian economist at consultancy Oxford Economics.

“The geographical spread of the Delta variant is going to be a concern for the Chinese authorities. We have already seen that they have very little tolerance for, you know, even a relatively small flare-up,” she told CNBC’s Squawk Box Asia. On Wednesday.

“We were hoping that the increase in vaccination rates would actually improve service consumption, but it looks like we’ll see a different kind of slow patch in the future and … the delayed recovery in household spending,” she added.

Fenner said she is sticking to her full-year growth forecast of 8.4% for China for now. That is slightly more than the forecast growth of the International Monetary Fund of 8.1% in China.

– CNBC’s Weizhen Tan contributed to this report.

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