Covid outbreak worsens in southern Chinese city of Guangzhou

Guangzhou city in the southern province of Guangdong is the hardest hit in the latest Covid outbreak. Pictured here are closed stores in part of the city on Oct. 31, 2022.

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BEIJING — Covid infections are surging in the capital of China’s export-heavy Guangdong province, raising concerns of another drag on the national economy.

Schools in eight of 11 districts in the city of Guangzhou moved classes online for most students as of Thursday. In the last few days, more parts of the city have ordered people to stay home, and non-essential businesses to close.

“As things stand, it is hard to tell whether Guangzhou will repeat the experience of Shanghai in spring this year,” Nomura’s chief China economist Ting Lu and a team said in a note late Wednesday. “If Guangzhou repeats what Shanghai did in spring, it will lead to a new round of pessimism on China.”

Earlier this year, the metropolis of Shanghai locked down for about two months and broader Covid controls resulted in a second-quarter national GDP that grew by only 0.4%, according to official figures. GDP bounced back in the third quarter with 3.9% growth, but then exports unexpectedly dropped in October.

It was not immediately clear to what extent Guangzhou’s latest business restrictions affected the ability of factories to operate. Many manufacturers are located outside the city but in the same province.

State-owned automaker GAC Group said its manufacturers in Guangzhou were operating normally as of Thursday morning. “The epidemic has not caused substantial impact,” the company said in a statement.

In just a week, the number of Covid infections with symptoms in Guangdong has multiplied five times to 500 as of Wednesday. During that time, infections without symptoms surged seven times to about 2,500 cases.

The latest outbreak prompted the American Chamber of Commerce in China to postpone an event in Guangzhou, which was already delayed from September, Michael Hart, president of the chamber, said Thursday. He expects two more of the chamber’s events in the city this year will be postponed.

“These travel impacts are hurting the abilities of local governments to pitch for investments,” Hart said, noting such investments were not lost but delayed.

“I’ve canceled more travel than I’ve actually been able to do,” he said.

Late fall is a popular time for conferences and business travel in China.

Notably, Guangzhou has indefinitely delayed its auto show that was set to kick off next week. The country’s biggest auto show that Beijing was supposed to host earlier this year was never rescheduled.

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