BREAKING: China Eases Quarantine Rules, Flight Bans in Covid Zero Pivot

(Bloomberg) — China reduced the amount of time travelers and close contacts must spend in quarantine, and pulled back on testing, in a significant calibration of the Covid Zero policy that has isolated the world’s second-largest economy and raised public ire. 

Travelers into China will be required to spend five days in a hotel or government quarantine facility, followed by three days confined to home, according to a National Health Commission statement Friday. The current rules require 10 days quarantine in total, with a week in a hotel then three days at home.

The same shortened quarantine length will now also be applied to close contacts of infected people, minimizing the disruptive practice of contact-tracing that has seen millions thrown into centralized facilities when officials race to stamp out spread. Close contacts of close contacts will now no longer be identified, added the statement. 

In a further boon to international travel links, a controversial system that penalizes airlines for bringing virus cases into the country will also be scrapped, the statement said. The changes were all part of a new suite of 20 measures meant to guide officials in Covid control. 

Bloomberg News reported in October and November that officials were discussing these changes.

The suite of changes is the furthest-reaching overhaul of China’s virus approach since the pandemic began, and potentially marks the beginning of the country’s move to rejoin a world that’s living with the virus. Chinese stock gauges extended a rally on the news, while the yuan strengthened and commodities surged. 

The fact that the easing comes at a time when Covid cases nationwide have surged to a six-month high, with major outbreaks in Guangzhou and Beijing, reflect an unmistakable change in President Xi Jinping’s zero-tolerance stance. On Thursday, the country’s top seven leaders, chaired by Xi, issued instructions for a more targeted, decisive approach to Covid, in noticeably milder rhetoric than before. 

Yet considerable uncertainty remains over whether these are China’s first steps towards ultimately dropping all Covid controls, or merely the country’s new indefinite posture — still the most onerous virus control regime in the world. 

Bruce Pang, chief economist and head of research for Greater China at Jones Lang LaSalle Inc., said he found some market interpretations of the new announcement “too optimistic.”

“The Covid policy will only be fine-tuned in the short term, with the focus shifting between eliminating cases and making more precise measures,” he said.

China’s adherence to Covid Zero — along with a property market slump — have hit economic activity this year, pushing down consumer and business confidence as people are stuck in a cycle of outbreaks, lockdowns and reopenings. Domestic demand has struggled with disruption from Covid controls, weighing on trade as exports already come under pressure from slowing global demand, adding to the economy’s problems.

Walking Slowly

The Friday statement included a number of other eased guidelines: only one pre-departure PCR test will be required now for travelers attempting to enter China, down from two. And when faced with outbreaks, local officials are being asked to avoid city-wide mass testing, unless transmission chains are unclear. 

China’s Tolerance for Xi’s Unyielding Covid Fight Is Cracking

Nevertheless, China’s reopening process will likely remain slow and cautious, with millions of the country’s elderly still under-vaccinated, and a deeply-rooted public fear of Covid after years of propaganda demonizing Western countries’ lax attitudes. 

“For China, walking slowly is the most stable option. Walking too fast, the situation might be turned upside down, because the most mainstream problem is that the people there don’t have the right understanding of Covid,” said Jin Dong-Yan, a virologist at the University of Hong Kong. 

“The policy changes are in a right direction. But if you want China to reach the endgame immediately, that’s not possible,” he said. 

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