An outbreak of the Delta variant in China is testing Beijing's commitment to its zero-tolerance policy for new infections. Since the latest outbreak began on 20 July in Nanjing, capital of Jiangsu province, authorities have confirmed more than 414 locally transmitted infections in 15 provinces. Around 80% of those are in Jiangsu, but a handful of cases in Beijing triggered lockdowns of residential compounds there. Meanwhile, Shanghai reported its first new local case in nearly six months on 3 August, triggering the lockdown of one residential compound, though city health authorities said this case is not linked to the Nanjing outbreak.
Given China's proven record of controlling the virus, the latest outbreak is unlikely to spiral out of control. Nevertheless, the incident will discourage authorities from easing the strict travel restrictions and quarantine requirements that have left many former expats out of the country since the pandemic began. Even before the Nanjing outbreak, Chinese scientists had predicted that these restrictions would remain in place through at least mid-2022 – and possibly through the end of next year – as authorities aimed to ensure the safety of the Beijing Olympics in February and the five-yearly party congress in November. The Ministry of Public Security acknowledged on 30 June that immigration authorities had stopped processing passport applications for non-urgent purposes this year, though study abroad, work, and business travel are still permitted.
The Nanjing outbreak also occurs as the Politburo acknowledged last week that economic growth is slowing. Household consumption – especially consumer services like tourism, dining, and entertainment – have lagged behind China's broader economic recovery since mid-2020, with strength in exports and housing picking up the slack. The latest outbreak will set back the consumption recovery, just as export growth is expected to slow and the Politburo pledged to continue efforts to cool the frothy property market. The consumption setback may force authorities to accelerate the pace of monetary and fiscal easing, which the Politburo indicated would be gradual.
The outbreak will derail summer travel plans for at least a few weeks. Cities including Beijing have already issued directives requiring that travelers show a negative Covid-19 test before leaving the city. Hotels are requiring similar documentation from travelers, and even those who can meet these requirements are reluctant to travel, fearing that they may be unable to return home. That is because China's digital health code system incorporates travel records, so returnees from a city where new cases have occurred may be prohibited from entering their home cities until 14 days after leaving the location of an outbreak. Nationwide, taxis and retail locations have resumed enforcements for masking and showing digital health codes as a condition of entry.
In a sign of the government's enduring commitment to zero-tolerance, Wuhan, which had reported no local cases since May, announced it will test all of the city's 12mn residents after discovering three cases of the Delta variant on 2 August. Some experts in China are quietly advocating for a less stringent approach to virus control under which authorities would tolerate a modest degree of community spread as the necessary cost of re-opening travel. But the zero-tolerance mentality and the accompanying test-and-trace infrastructure is well entrenched, and so far there is no sign that authorities intend to shift course.