Shanghai lockdown tests resilience of 'Zero-COVID' strategy, as economic and social tolls grow

HONG KONG -- China’s largest city is buckling under its biggest COVID-19 outbreak of the pandemic, with infections continuing to rise, despite a strict lockdown of more than 25 million Shanghai residents.

Cases in Shanghai surged on Wednesday to another record high of 26,330, of which just 1,190 were symptomatic. There is no end in sight to the lockdown, despite there being no official deaths reported.

Yet the Chinese government continues to relentlessly pursue its no-tolerance ‘Zero-COVID’ strategy as the costs on the economy and social stability are mounting.

China has hit back at the United States for ordering its non-emergency consulate staff and diplomats’ families to leave the locked-down city, saying it was "weaponizing" the issue.

The U.S. State Department announced the decision on Monday, saying it was "due to a surge in COVID-19 cases and the impact of restrictions.”

The U.S. pointed to the risk of children and parents being separated by a policy that has now been partially relaxed.

In March, as Omicron snuck into the financial, commercial and shipping capital, Shanghai had vowed not to impose a lockdown. They reversed course as cases climbed. Two weeks later, the normally lively streets of Shanghai are eerily quiet, as its millions of residents underwent several rounds of mass testing.

Under the "Zero-COVID" policy, all infected people are sent to hospitals or isolation centers.

Shanghai resident and expat Alessandro Pavanello told ABC News that he was moved from his home to an isolation facility on April 9 after testing positive. He showed ABC the partitioned mass hall where he sleeps. He was given a bucket and cloth to wash himself at the sink, as there are no showers.

“Everyone is in close contact with each other, and, as you can imagine, there is absolutely no privacy,” Pavanello said.

Other Shanghai residents’ experiences have been less intensive. Jamie Peñaloza compared it to memories of summer camp: “Announcements, call to duty, chores, and rest time.”

Peñaloza, who lives in Shanghai’s affluent Former French Concession, told ABC News that the most “surreal” part of the lockdown is being told to go for testing at short notice.

Peñaloza described loudspeakers blaring, giving updates and the "get tested now" orders, over birdsong in her eerily quiet neighbourhood. She said the empty and off-limit roads are now populated only by blue and white protective gowns gliding along by foot, bicycle or ambulance.

“While the communication is unpredictable,” she said, “The procedures are very organised. At the blink of an eye, the streets were cordoned off and testing sites pitched up, with queues that moved fast and registration requiring no more than a few taps of a button on an app and a gowned attendant scanning the resulting QR on your phone screen.”

While some residents complained of food shortage, Peñaloza said the recent government rations to her compound have been plentiful: “Millions of individual grocery packages were bagged and distributed within two days, for each and every single household of each and every single building; imagine!”

Shanghai this week begin easing some movement for residents in low risk zones, but the restrictions could be tightened as soon as cases are detected in their areas again.

“One person can test positive and that just sets the score back to zero,” Peñaloza said.

Japanese bank Nomura estimates there are now almost 200 million people subject to partial or full lockdown across 23 Chinese cities, including Shanghai. The large southern port city of Guangzhou immediately ordered testing of its 18 million residents after detecting just three positive cases last Friday.

Truck drivers have been prevented from taking goods to major shipping ports in Shanghai, which may cause further disruptions to global supply chains. American companies operating in China, from Apple to Tesla, have also been impacted by their factories being unmanned.

“There are signs that it’s becoming increasingly difficult to implement this policy as the social economic cost is rising rapidly and exponentially in a way,” said Yanzhong Huang, a public health expert at the Council on Foreign Relations in the U.S.

Huang said that prolonged lockdowns in Shanghai could hurt the competitiveness of China’s export economy in the longer term, especially as the city contributes to about a third of China’s total GDP.

“When other countries now are learning to coexist with the virus and their economy and the manufacturing capacity recovered by China's, the export sector will be affected,” Huang said.

But, for now, China is doubling down.

Liang Wannian, head of China's National Health Commission COVID-19 response expert panel and one of the principal architects of the "Zero-COVID" strategy, said earlier this week that China “doesn’t believe in ‘laissez-faire’.

”Dynamic Zero COVID is a scientific policy that, if implemented properly and correctly, will yield the most benefits at a minimal cost,” Liang said, “China will stick to this policy under the guideline of putting people and their lives first.”