End of Shanghai Lockdown Announced

On the 31st of May at midnight, all general restrictions are to be lifted - but will this restore confidence?

According to an announcement just posted by the Shanghai government on their Wechat account, the lockdown regime is to end at midnight on the 31st. Starting at midnight, all restrictions on entering and exiting residential areas without cases in the past 14 days are to be lifted.

After midnight, neither local neighborhood committees nor or residential compound management companies are permitted to issue restrictions or limitations of any kind – UNLESS the compound is in one of the black list categories, i.e. has registered new cases in the past 14 days. Some large compounds are subdivided internally, so that cases in one building do not affect residents of other buildings. It’s unclear if there is any hard rule about this.

At the same time all public transport is to be revived, and private cars will be once again allowed on the roads without restrictions.

The announcement ended with several slogans – three do this, five do that: Keep wearing masks (forever?), maintain social distancing (how??), keep scanning the government site QR codes (场所码) when entering a new building, keep watching your health (for what?), keep testing. They then added a plug for more vaccination.

Whoever wrote this announcement has either never used the Shanghai metro or does not intend for his readers to take all of this seriously.

This follows a prior announcement on May 29th that negative PCR test results within 72 hours would be required to enter “specified” public places as well as to use public transport. Little booths have been set up all over the city and in many residential compounds to offer these tests. It’s unclear what the opening hours will be.

Only time will tell which locations are “specified”.

Shanghainese who have a “sheep” (阳) note in their testing history – i.e. those who got “it” (中标了) – were reminded to show their mark of Cain before testing, presumably to avoid the “false” positives they often produce. This implies that their samples are graded based on a different standard than those of the general public; likely 35 cycles instead of 40.

As usual, there was no explanation of the logic behind any of this, how long these measures are supposed to last, and what will happen to companies where one day some staff member tests positive. Will everyone working at those companies be shipped off to quarantine when that happens? What about people who might have shared a metro car with them? Or visited a restaurant around the same time? All off to the camps with them?

In summary: While this restoration of basic civil liberties to the general population is obviously a big step forward, these measures in no way address the biggest obstacle to the restoration of confidence in Shanghai as a place to live and work: uncertainty. Until that takes place, as discussed in our previous article on the market outlook, it’s a fair guess that business confidence in the future will remain at a low ebb.

On a side note, we do seem to be getting the market bounce we speculated about last week – the RMB is up, stock markets are up and crypto is up. But will it last?