Andrew Galbraith, David Stanway

SHANGHAI (Reuters). China’s financial capital of Shanghai initiated a second-stage lockdown on Monday. This included closing tunnels and bridges, as well restricting traffic, in an effort to limit the number of COVID-19 cases.

Shanghai’s government announced a snap lockdown on Sunday. It will divide the city roughly by the Huangpu River and last nine days. This is to permit for “staggered testing.” It’s the worst COVID-related disruption ever to strike the city.

The city government has made a turn. As late as Saturday, it denied Shanghai would ever be shut down. Instead, the administration pursued a piecemeal approach to reducing infections.

Wu Fan is a member Shanghai’s COVID expert team. He told an audience that recent mass testing revealed “large-scale” infection in the city. This triggered a stronger response.

“Controlling the outbreak of large scale infected in our community is vital because once we get rid of infected individuals, transmission will be stopped,” she stated, noting that further testing will continue until every risk has been eliminated.

According to the Shanghai government, a record number of 3,450 cases of COVID were reported there on Sunday. This represents nearly 70%, and 50 cases are symptomatic.

According to the health authority’s regular bulletin, nationwide, 5,134 new cases of symptomatology and 1,219 cases of asymptomatic were reported on Sunday.

DISRUPTIONS

Shanghai, a significant engine for China’s economy has been striving to heed the call of President Xi Jinping to reduce COVID’s impact on business and lives.

Wu stated at a briefing that Shanghai cannot be held back for too long due to its important role in both the national economy and the global economy.

Mass testing, which was conducted on Sunday, disrupted transportation, healthcare, and other economic activities. On Monday, citywide sales of land were also stopped.

The Shanghai Public Security Bureau announced that it would close cross-river tunnels and bridges as well as highway tollbooths located in Shanghai’s eastern region until April 1.

Similar restrictions will be in place for areas west of Huangpu River from April 1 through April 5.

According to the bureau, traffic control will be in place on the highways that lead into the city. Those who leave would need to prove negative nucleic acid testing results within 48 hours.

On Sunday, the city government announced that it will suspend all public transportation, ride-hailing and other services in areas where they are not allowed to enter. The city government also directed the suspension of all work in firms and factories, except those providing public services or food supply.

Many hospitals across Shanghai have been closed as staff are released to help with mass testing.

According to two sources familiar with the matter, Tesla (NASDAQ) will suspend production at its plant in the city over the course of four days. It is situated in an area of Shanghai that has been affected by the initial stages of the lockdown.

Tesla didn’t immediately reply to our request for comment.

Chinese chipmaker Semiconductor Manufacturing International Corporation said however that its operations in Shanghai were regular.

China’s recent increase in COVID cases has put pressure on China, the second largest economy. This likely will further dampen consumer spending.

Analysts from Nomura stated in a Saturday note that “Due the strong transmissibility Omicron strategy and strengthened (zero COVID strategy),” markets should be especially concerned about Q2’s slide in growth,” Nomura noted.