A two-phase lockdown on Shanghai's 26 million people is testing the limits of China's hardline “zero-COVID' strategy whose effects are being felt beyond the country's borders. China's largest city is the center of finance, manufacturing and trade.
Market reactions including Monday’s 7% drop in oil prices in London don’t reflect the “true reality of the situation,” but investors already were uneasy about China and the global economy, said Michael Every of Rabobank.
The measures confining Pudong residents to their homes, closing nonessential businesses and requiring mass testing are due to be lifted Friday. At that time, the vast Puxi area on the opposite side of the Huangpu river that will go under lockdown. Shanghai recorded 4,477 new cases on Monday, all but 95 of them asymptomatic. Despite a nationwide surge, numbers of new COVID-19 deaths have remained low, with two more added on March 20 for a total of 4,638.The Shanghai lockdown stands to become the largest of any city in China’s campaign against the virus, in which millions have been confined to their homes for weeks at a time in cities across much of the country.
“China should be able to contain the virus in the next few weeks, as lockdown is effective,” global financial services firm Macquarie Group said in a report.