Shanghai Lifts Lockdown After Two Months... City Functions Expected to Take Time to Recover

Lockdown Ends on the 1st of Next Month... Free Movement Becomes Possible

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] Shanghai, China, which has been under lockdown for two months, will begin normalization starting from the 1st of next month. Residents will be able to move freely, and businesses and self-employed individuals will be able to resume economic activities. However, since the city's functions have been paralyzed for a long time, it is expected to take time for a full recovery.

According to the announcement by Chinese authorities, Shanghai will lift the COVID-19 lockdown next month and begin efforts to return to normal life. On the 30th, Shanghai posted on its official WeChat account that starting from 0:00 on the 1st of next month, except for areas designated as high-risk, medium-risk, or control/management control zones, there will no longer be restrictions on residents' access to residential complexes.

With the citywide lockdown lasting over two months effectively coming to an end, the 25 million residents of Shanghai will be able to move freely going forward. Operation of regular cars and motorcycles will be allowed again, and taxi and ride-sharing services will resume.

Businesses and self-employed individuals will be able to resume normal economic activities. This is because the city authorities announced the day before that they will abolish the 'white list' system, which was a list of companies permitted to resume operations and business starting from the 1st of next month.

However, the prevailing view is that full normalization will be difficult to achieve from the 1st of next month. Shanghai itself has presented a timetable for gradual and phased full normalization, aiming for the city to be fully recovered by mid to late next month.

In fact, public transportation such as subways and buses will recover starting from a 'basic operation' stage, so it will take time to reach full normalization. Roads leading outside Shanghai will still be subject to current control regulations, so movement to other parts of China is expected to remain restricted. The abolition of the white list system for businesses and self-employed individuals does not mean that practical administrative regulations have disappeared. Especially since the 'zero COVID' policy is still in effect, if COVID-19 spreads again, lockdown measures could be reinstated.

Meanwhile, Shanghai entered a full lockdown starting March 28 as the COVID-19 Omicron variant began to spread. Since March, more than 600,000 people in Shanghai have been infected with COVID-19, with daily new infections peaking at around 27,000 in April before dropping to below 100 on the 29th.

The two-month lockdown appears to have effectively paralyzed Shanghai's economy and caused significant damage. Due to the extreme COVID-19 lockdown, Shanghai citizens suffered from food supply shortages and endured hardships as the medical system collapsed. According to official statistics, Shanghai's industrial production and retail sales decreased by more than 50 trillion won compared to the same month last year as of April. As an important open city in China, Shanghai also imposed considerable burdens on the global supply chain, logistics issues, and the world’s industry and economy.