China’s coronavirus epicenter moves to Guangzhou, more lockdowns loom

  • Southern manufacturing hub battles worst outbreak of COVID-19
  • Cases are doubling in Zhengzhou, the production base of Apple supplier
  • Chinese stocks and currency slip on virus fears

Today, Tuesday, official data showed a rise in cases of the new Corona virus in Guangzhou and other Chinese cities, as the global manufacturing center became the latest focus of the Corona virus in China, and it tests the city’s ability to avoid a Shanghai-style closure.

Nationwide, the number of new locally transmitted infections rose to 7,475 on November 7, according to the China Health Authority, up from 5,496 the previous day and the highest since May 1. Guangzhou accounted for nearly a third of the new infections.

The increase was modest by global standards but significant for China, where outbreaks are quickly addressed as they arise. Economically vital cities, including the capital, Beijing, are calling for more PCR testing of residents and closing neighborhoods and even districts in some cases.

The sharp recovery will test China’s ability to keep its COVID measures invasive and targeted, and defy investor expectations that the world’s second-largest economy may soon reopen its borders or even roll back a zero-tolerance approach.

The yuan weakened against the dollar and Chinese stocks fell on Tuesday as the rising burden of the COVID case eroded optimism about China reopening its borders, closed to most visitors including tourists since 2020.

Guangzhou, capital of Guangdong Province, reported 2,377 new locally transmitted cases on November 7, up from 1971 the previous day. It was a dramatic jump from double-digit increases two weeks ago.

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With the number of cases rising, the sprawling southern city, dubbed the “factory floor of the world,” has overtaken Hohhot, northern Inner Mongolia as the current epicenter of the coronavirus in China, in its most serious outbreak ever.

Several areas of Guangzhou, including central Haizhou, have imposed varying levels of restrictions and closures. But, so far, Guangzhou has resisted a blanket shutdown like the one in Shanghai earlier this year.

Shanghai, which is not currently facing a resurgence of COVID, went into lockdown in April and May after reporting several thousand new infections per day in the last week of March.

“We’ve been working from home for the past couple of days,” said Aaron Shaw, who runs a company in Guangzhou.

“Only a few complexes have been closed so far. Mostly we see disruptions in the form of public transit services being suspended and compound security banning mail and food delivery. And we have to do PCR tests every day.”

other cities

Elsewhere in Guangdong province, the country’s largest air show kicked off Tuesday in Zhuhai, with some attendees and delegates suddenly finding themselves barred from the event due to COVID measures amid rising cases in the port city.

Zhengzhou, the capital of central Henan province and a major production base for Apple (AAPL.O) Foxconn supplier (2317.TW)it reported 733 new domestic cases on November 7, more than double the day before.

In Beijing, authorities discovered 64 new local infections, a slight increase compared to Guangzhou and Zhengzhou, but enough to spark a new wave of PCR tests for many of its residents and to close more buildings and neighborhoods.

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

“We still believe that although Beijing may adjust some of its COVID-related measures in the coming weeks, these adjustment measures could be more than offset by local officials’ tightening of the COVID eradication strategy.”

In the southwestern city of Chongqing, the city reported 281 new local cases, more than double from 120 the day before.

Chongqing officials have placed new zone restrictions in at least four districts, and closed some karaoke halls, dance halls and entertainment venues, in a situation that a local official described as “complicated and dangerous.”

In the coal-producing region of Inner Mongolia, the city of Hohhot reported 1,760 new local cases on November 7, up from 1,013 the day before.

Additional reporting by Ryan Wu, Bernard Orr, Liz Lee, Jing Wang, and Josh Yi; Editing by Raju Gopalakrishnan and Stephen Coates

Our criteria: Thomson Reuters Trust Principles.

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