China Eases Covid Rules and Shortens Quarantine

On Friday, China is easing some of its strict Covid-19 rules, including a two-day reduction in quarantine for close contacts of infected individuals and incoming travelers, as well as the cancellation of penalties for airlines bringing in too many Covid cases.

The easing of rules, a day after the new Standing Committee of the Chinese Politburo discussed Covid at a meeting chaired by President Xi Jinping, has buoyed markets, with the Shanghai benchmark CSI 300 jumping by 3 percent, and the yuan rising to a one-month high.

Under the new rules, the time for centralized quarantine for close contacts and incoming travelers has been shortened from seven to five days. The requirement for an additional three days of home isolation after centralized quarantine remains.

Additionally, China will no longer attempt to identify ‘secondary’ contacts – which has been a major inconvenience for citizens caught up in comprehensive contact tracing efforts when a case is found – while still identifying close contacts.

Optimizing and adjusting prevention and control measures is not easing prevention and control, let alone opening up; rather, it is an adjustment to the new situation of epidemic prevention and control and the new characteristics of Covid-19 mutations, said the National Health Commission (NHC).

Furthermore, China is adjusting its categorization of Covid risk areas to simply ‘high’ and ‘low’ risk – eliminating the ‘medium’ category, in an effort to reduce the number of people affected by control measures.

The NHC also stated that it will develop a plan to accelerate vaccination, which experts say is urgently needed before the country begins to more fully abandon its zero-tolerance Covid policy that has made China a global exception and incurred significant economic costs.

The rules are being eased despite the highest surge in cases in recent months and the fact that Beijing and the central city of Zhengzhou are recording record numbers of cases.

Authorities reported 10,535 new domestic cases on Thursday, which is a low number by global standards, but the highest in China since April 29, when Shanghai, the commercial hub, was battling its most serious outbreak under strict quarantines.

‘Stay at Home’

The southern city of Guangzhou, a manufacturing and transport hub and the new epicenter of China’s fight against Covid, reported 2,824 new local cases on Thursday, marking the fourth consecutive day that the number of infections exceeded 2,000.

– All residents must stay at home, the district government stated. Only one person from each household is allowed to buy daily necessities on a schedule – it is mandated.

All public transport in the district of 1.8 million people has been suspended, and mandatory PCR tests will be applied to ‘every household and every individual,’ it was said.

Will Zhang, 30, a graduate student, said that universities in Guangzhou have been placed under lockdown, including the spacious university town in Panyu district with over a dozen institutions and a population of more than 300,000.

– Since yesterday, campuses located within the university town of Guangzhou have been under lockdown. People are only allowed to go out, but not to enter – Zhang said.

In some cases, food is delivered to students confined in multi-story dormitories by construction cranes, he said.

Beijing, Zhengzhou, and Chongqing have also tightened measures as daily cases have risen to the highest levels since the beginning of the pandemic.

Beijing reported a record 118 new domestic cases on Thursday, which is still low compared to other Chinese cities.

Authorities in many parts of the city of nearly 22 million people have urged residents to undergo PCR tests daily or they will be barred from entering public spaces, including offices, entertainment venues, and fitness centers.

Sanya, a coastal resort city in the southern island province of Hainan, announced that it will begin a round of mass testing on Saturday.

– This meeting further illustrates that policymakers have begun to focus more on optimizing Covid control policies. We still expect policymakers to start preparing for a gradual easing of the zero-Covid policy stance, while actual easing may not begin until the second quarter of next year, Goldman Sachs concludes in a note following the Standing Committee of the Politburo meeting on Thursday, but before the announcement on Friday.