February 4, 2023

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Chinese make travel plans as COVID rules are further relaxed by Reuters

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©Reuters. Travelers stand next to their luggage at Beijing Capital International Airport amid the outbreak of the coronavirus disease (COVID-19) in Beijing, China, December 27, 2022. REUTERS/Tingshu Wang 2/3

By Sophie Yu and Joe Cash

BEIJING (Reuters) – Chinese, cut off from the rest of the world for three years by COVID-19 curbs, flocked to travel destinations ahead of borders reopening on Tuesday, even as rising infections continued to strain the healthcare system and roiled the economy.

Zero-tolerance measures — from closed borders to frequent lockdowns — have plagued China’s economy since early 2020, fueling the mainland’s biggest public discontent since President Xi Jinping took power in 2012 over the past month.

His policy U-turn this month means the virus is now spreading largely unchecked in the country of 1.4 billion people.

However, official statistics showed just one COVID-related death in the past seven days through Monday, raising doubts about the government’s data among health experts and residents. The numbers do not tally with the experience of much less populous countries after they reopened.

Doctors say hospitals are overwhelmed with five to six times more patients than usual, most of them elderly. International health experts estimate millions of daily infections and forecast at least one million COVID deaths in China next year.

Still, authorities are determined to dismantle the last remnants of their zero-COVID policy.

In a major move to ease border restrictions cheered by Asian stock markets on Tuesday, China will no longer require travelers to quarantine from Jan. 8, the National Health Commission said late Monday.

“It finally feels like China has turned the tide,” AmCham China Chairman Colm Rafferty said of the planned lifting of quarantine restrictions.

Data from travel platform Ctrip showed that searches for popular cross-border travel destinations increased 10-fold within half an hour of the news. Macau, Hong Kong, Japan, Thailand and South Korea were the most in demand, according to Ctrip.

Data from another platform, Qunar, showed international flight searches increased sevenfold within 15 minutes of the news, with Thailand, Japan and South Korea topping the list.

China’s management of COVID will be downgraded from the current top-level Category A to the less severe Category B from Jan. 8, the health agency said, as it has become less virulent.

The change means authorities will no longer be forced to quarantine patients and their close contacts and lock down regions.

But amidst all the excitement about a gradual return to a pre-COVID way of life, pressure mounted on China’s healthcare system, with doctors saying many hospitals were overwhelmed, while funeral homes report a surge in demand for their services.

Nurses and doctors have been asked to work while sick and retired medical workers in rural communities have been reinstated to help, state media reported. Some cities are struggling to ensure supplies of anti-fever drugs.

“Just look at the funeral homes in different cities. I heard that we have to wait three to five days for cremation here,” one person in eastern Shandong province complained on social media.

SHORT-TERM PAIN

While the world’s second-biggest economy is expected to experience a significant recovery over the next year, it faces a rough ride in the coming weeks and months once the initial shockwave of infections has subsided as workers become increasingly ill.

Many stores in Shanghai, Beijing and elsewhere have had to close in recent days as employees have been unable to come to work, while some factories have already furloughed many of their workers for the New Year holidays at the end of January.

“Concerns about a temporary supply chain distortion linger as infections hit workers,” analysts at JPMorgan (NYSE:) said in a note, adding that their tracking showed subway traffic in 29 Chinese cities that many people are restricting their movements as the virus spreads.

Tuesday’s data showed that industrial profits fell 3.6% year-on-year from January to November, versus a 3.0% decline from January to October, reflecting the toll of anti-virus restrictions introduced last month, including in the main production regions.

The lifting of travel restrictions is positive for the $17 trillion economy, but strong caveats apply.

“International travel … is likely to increase, but it may be many months before volumes return to pre-pandemic levels,” said Dan Wang, Bank China’s chief economist.

“COVID is still spreading in most parts of China, severely disrupting the normal work schedule. Loss in productivity is significant and inflationary pressures could be acute in the coming months as the surge in demand will outpace the recovery in supply.”