Guangzhou's Covid outbreak deepens as more lockdowns loom in China

Covid-19 cases sharply escalated in Guangzhou and other major Chinese cities, official data showed on Tuesday, with the global manufacturing hub fighting its worst flare-up ever and testing its ability to avoid a Shanghai-style citywide lockdown.

New locally transmitted infections climbed to 7,475 nationwide on Nov 7, according to China's health authority, up from 5,496 the day before and the highest since May 1.

The increase was modest by global standards but significant for China, where outbreaks are quickly tackled when they surface. Economically vital cities, including the Chinese capital Beijing, have jumped on the rising infections, demanding more PCR tests for residents and locking down neighbourhoods and even districts in some cases.

The sharp rebound will test China's ability to keep its Covid measures surgical and targeted, and challenge the expectations of investors that the world's second-largest economy could soon reopen its borders or even back off from its zero-tolerance approach.

Guangzhou, capital of Guangdong province, reported 2,377 new local cases for Nov 7, up from 1,971 the previous day. It was a dramatic jump from just double-digit increases two weeks ago, as the sprawling southern Chinese city, dubbed the "factory floor of the world", battles its most serious outbreak ever.

Many of its districts, including Haizhu at the heart of city, have imposed varying levels of curbs and lockdowns. But, so far, Guangzhou has resisted a blanket lockdown like the one in Shanghai earlier this year.

Shanghai, currently not facing a Covid resurgence, went into a lockdown in April and May after reporting several thousands of new infections daily in the last week of March.

Zhengzhou, capital of central Henan province and a major production base for Apple supplier Foxconn, reported 733 new local cases for Nov 7, more than doubling from a day earlier.

In Beijing, authorities detected 64 new local infections, a small uptick relative to Guangzhou and Zhengzhou, but enough to spark a new burst of PCR tests for many of its residents and a lockdown of more buildings and neighbourhoods where cases had been found.

"The lockdown situation has continued to deteriorate quickly across the country over the past week, with our in-house China Covid lockdown index rising to 12.2% of China's total GDP from 9.5% last Monday," Nomura wrote in a note on Monday.

"We continue to believe that, while Beijing may fine-tune some of its Covid measures in coming weeks, those fine-tuning measures could be more than offset by local officials' tightening of the zero-Covid strategy."

In the southwest metropolis of Chongqing, the city reported 281 new local cases, more than doubling from 120 a day earlier.

Chongqing officials have put new curbs on areas in at least four districts, closing some karaoke lounges, dance halls and entertainment venues, in a situation which a local official described as "complex and severe".