China places millions in lockdown, dealing new blow to economy

China has placed millions of people under lockdown, dealing a new blow to the economy as it struggles to rebound from nearly three years of harsh “zero COVID” policies.

In Hebei, the province surrounding the capital, Beijing, authorities on Tuesday ordered almost four million people to stay at home until the end of the week as officials scrambled to bring a minor flare-up of COVID-19 under control.

In the southern tech hub of Shenzhen, officials suspended large events and ordered the closure of entertainment venues and wholesale markets in the Longhua district, following the announcement of similar measures a day earlier in three other districts.

Shenzhen’s latest measures, which include closing the world’s largest wholesale electronics market, bring nearly half of the city’s 18 million residents under tightened COVID curbs.

In Dalian, a major port in northeastern China known for soybeans and iron ore, some three million residents were placed under lockdown until at least Sunday.

In Tianjin, a port city in China’s northeast, authorities announced that more than 13 million residents would have to undergo mass testing from 6am following the discovery of 51 COVID cases.

China has doubled down on a zero-tolerance policy aimed at stamping out COVID-19 at almost any cost, even as the rest of the world learns to live with the virus.

Beijing’s doubling down on the controversial strategy comes as the ruling Communist Party gears up for a key meeting later this year at which Chinese President Xi Jinping is expected to secure an unprecedented third term in power.

China’s economy barely avoided contraction during the April-June quarter as lockdowns and border controls pummelled economic activity, with gross domestic product (GDP) expanding just 0.4 percent year on year.

“Markets could once again be hit in the next couple of weeks, likely triggering another round of cuts by economists on the street,” Nomura said in a note on Tuesday, highlighting the significance of new curbs in cities such as Shenzhen.