February 7, 2023

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China is reportedly delaying key Reuters economic meetings amid signs of a COVID surge

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©Reuters. People wearing face masks walk under surveillance cameras on a street amid ongoing outbreaks of the coronavirus disease (COVID-19) in Shanghai, China, 12 December 2022. REUTERS/Aly Song 2/2

By Brenda Goh and Farah Master

SHANGHAI/HONG KONG (Reuters) – Chinese leaders have reportedly postponed a key economic policy meeting amid mounting signs COVID-19 infections are nearly a week after the world’s toughest restrictions were lifted to prevent the spread of the virus increase.

President Xi Jinping and other Politburo members and senior government officials were expected to attend the closed-door Central Economic Work Conference this week to chart a policy course for China’s struggling economy in 2023.

A report by Bloomberg News Tuesday night, citing people familiar with the matter, said the meeting had been postponed and that there was no timetable for a postponement.

Policy insiders and economic analysts said the leadership is expected to finalize further stimulus moves and discuss much-anticipated growth targets at the annual three-day meeting.

The delay came as authorities continued to reverse Xi’s previously firm “zero-COVID” policy.

Long lines are emerging outside fever clinics in a worrying sign a wave of infections is building, although official numbers of new cases have fallen in recent weeks as authorities scale back testing.

And companies in China, from e-commerce giant JD (NASDAQ:.com) to cosmetics brand Sephora, are rushing to minimize the impact of rising infections — by distributing testing kits, encouraging more work-from-home and, in some cases, trucks -Procure charges of medicine.

The signs come as China seeks to quickly join a world that has largely reopened after unprecedented popular protests against harshly enforced mass lockdowns three years into the pandemic.

The protests were the strongest display of public defiance during Xi’s decades-long presidency and come amid growth numbers for China’s $17 trillion economy, the second largest in the world, among the worst in 50 years.

Despite the spread of infections, people in China on Tuesday cheered the withdrawal of a state-mandated app that could track whether they had traveled to COVID-hit areas.

When authorities disabled the “Route Code” app at midnight Monday, China’s four telecom companies said they would delete user data associated with the app.

“Goodbye Itinerary Code, I hope never to see you again,” read a post on social media platform Weibo (NASDAQ:), as people hailed the demise of an app critics feared will contribute to mass surveillance of the public could be used.

“The hand that was stretched out to exercise power during the epidemic should now be withdrawn,” wrote another user.

And in another sign of policy easing, Chinese healthcare company 111.inc has started selling Pfizer’s (NYSE:) Paxlovid for the treatment of COVID-19 in China through its app — a drug previously only available in some hospitals .

According to the platform’s customer service, it sold out just over half an hour after local media reported the listing.

For all the relief at last week’s decision to begin dismantling the government’s zero-COVID policy, there are fears China may now be paying a price.

Infections are expected to continue to rise during next month’s Chinese New Year holiday, when people travel across the country to be with their families – a risk for a population of 1.4 billion who have been under lockdowns after prolonged isolation “Herd immunity” is absent and relatively low vaccination rates among older people, according to some analysts.

Experts say China’s fragile healthcare system could quickly be overwhelmed if these fears prove true.

Measures taken last week to ease COVID curbs included waiving mandatory testing before many public activities and restricting quarantine.

Prominent Chinese commentator Hu Xijin, a former editor-in-chief of the nationalist state tabloid Global Times, said Beijing is now at the epicenter of a rapid new wave of infections, but the city has the resources to deal with it.

“The rate of new infections is really amazing, and I believe what we are witnessing here must be one of the most violent virus transmission rates in the world since the beginning of the COVID pandemic,” Hu said.

HONG KONG RELAXED

Beijing’s envoy to the United States said Monday he believes China’s COVID-19 measures will be further relaxed in the near future and international travel to the country will also become easier.

China has all but closed its borders to international travel since the pandemic originated in the central Chinese city of Wuhan in late 2019. International flights remain at a fraction of pre-pandemic levels and arrivals must quarantine for eight days.

The financial hub of Hong Kong, which already operates less stringent border controls than mainland China, said Tuesday it would drop the requirement for incoming travelers to avoid bars and restaurants for three days after arrival.

Hong Kong will also scrap its mobility-tracking app, which regulates access to restaurants and venues like gyms, clubs and salons, Chief Executive John Lee said.

While the lifting of controls is expected to improve prospects for global growth in the longer term, analysts say Chinese companies will struggle in the coming weeks as a wave of infections causes staff shortages and makes consumers suspicious.

Chinese stocks fell on Tuesday as a recent rebound sparked by hopes of a reopening gave way to concerns about the spread of infections. The yuan currency has been little changed, but it is already facing its worst year since 1994, when China unified official and market exchange rates.