Shanghai comes back to life after two months as China eases COVID lockdown restrictions

Shanghai (China): Shanghai residents visited the waterfront Bund and ate and drank along streets patrolled by police early Wednesday as people in China’s largest city savored the easing of its severe two-month COVID-19 lockdown.

The lockdown set back the national economy and largely confined millions to their homes, while its ruthless and often chaotic enforcement prompted protests in person and online that are seldom seen under China’s strict authoritarian government.

Full bus and subway service will be restored Wednesday, as will basic rail connections with the rest of China. Still, more than half a million people in the city of 25 million are still under lockdown or in designated control zones because virus cases are still being detected.

The government says all restrictions will be gradually lifted, but local neighborhood committees still wield considerable power to implement sometimes conflicting and arbitrary policies.

For instance, at least 650,000 residents will remain confined to their homes. China's overall policy of "zero Covid" remains in place and people catching Covid face quarantine or hospital. Their close contacts also face the prospect of removal to quarantine and the area immediately around where they live being locked down again.

A basic service has resumed on public transport. Shops have opened, with larger ones operating at 75% capacity. Restaurants can resume serving but dining in is not allowed. Cinemas, museums and gyms remain closed. And most children will not return to face to face schooling.

Shanghai has been under some form of lockdown since late March, leaving tens of millions of people confined at home and leading to high levels of public distress. The restrictions upended business in virtually every sector and brought the city to a standstill.

The city's handling of the lockdown provoked rare protests, with people at times banging pots and pans outside their windows to show discontent. Those were awkward scenes for the ruling Communist Party in a sensitive year when President Xi Jinping is expected to secure a precedent-breaking third leadership term.

Major automakers, including Tesla (TSLA) and Volkswagen (VLKAF), were forced to suspend production temporarily, while electronics makers like Apple (AAPL) also reported severe supply chain disruptions around the city.

China's economy has been hit hard by the pandemic and the government's "zero Covid" approach, forcing analysts to lower their growth forecasts for the year.

Last week, UBS downgraded its GDP estimate for 2022 to 3%, much lower than China's official target of 5.5%.

(with inputs from AP)