SHANGHAI, (Reuters) – The Chinese metropolis Shanghai is moving closer to a gradual reopening after two months of COVID-19 lockdown. Beijing has maintained restrictions that severely restricted movement even though case numbers are declining.

Shanghai plans to end the lockdown on Wednesday. While more residents have been allowed to move out and businesses were permitted to reopen, many remain in their own homes. Most shops can only deliver to the restricted areas.

Shanghai officials encouraged continuedvigilance Saturday, even though most residents are located in “prevention” areas with the lowest risk.

Zhao Dandan, the deputy director at Shanghai Municipal Health Commission said, “Wear masks out in public, no gathering, and keep social distance.”

Social media videos showed friday night revellers, including foreigners, dancing on the streets in central London. They were interrupted by police who told them to return home.

Another video featured a crowd singing “Tomorrow Will Be Better” from 1985, accompanied by a keyboard player. After the song was finished, the police arrived and asked them to return home. There were online accolades for this show of restraint.

Residents of China’s biggest and most vibrant city were frustrated by the two-month-long lockdown. Many thousands had been sent to quarantine in cramped central facilities. During its initial weeks, many residents were unable to get enough food and medical attention.

ECONOMIC IMPACT

While the national case statistics are increasing, China’s strict adherence with zero-COVID is destroying the world’s second largest economy. It has also rattled global supply chain networks. Investors worry about China’s lack of a path to exit from the policy that has been a key priority of President Xi Jinping.

Data released Friday showed that industrial companies’ April profit fell 8.5% annually. This was their largest drop in 2 years. High raw material prices, supply chain chaos and COVID-19 curbs, which squeezing margins, disrupted factory activity, all contributed to the economic effect.

China’s strategy, Beijing claims is required to save people and protect its health system, has been challenged in the Omicron variant. The majority of the rest of the world is however trying to continue with their normal lives despite continuing spread of coronavirus.

This conflict, between halting the spread COVID and supporting economic growth, comes in a politically delicate year. Xi is expected to win an unprecedented third term as leader at a Congress of the ruling Communist Party this autumn.

Premier Li Keqiang, who acknowledged weak growth in Wednesday’s emergency meeting, said economic difficulties were worse in certain aspects than they would be in 2020. This was after China was first hit by COVID-19. Market expectations were high for further economic support after his remarks.

STEPS OF SMALL PRICE

Shanghai’s suburb Fengxian cancelled Friday the requirement that residents have a permit to leave.

Shanghai Securities News, the state-run newspaper that covers the financial industry, said there were modest signs of a return to normal. The more than 10,000 bankers or traders who lived in and operated from their offices during the lockdown are gradually coming home.

China Citic Bank Shanghai branch intends to send close to 30 people to its office tower by Wednesday. 11 Bank of Shanghai staff returned to their offices this week, according to the newspaper. According to the newspaper, more than 100 branches of banks were back in business as at Friday.

China reported Saturday 362 coronavirus infections per day, down from 444 the previous day. New Friday infection rates in Beijing fell from 444 to 246 this week, largely because of tight restrictions.

Officials from Shanghai reported that one case had been identified in Songjiang, but they expressed their confidence in the steps they took to track down and eliminate the infection.

Sun Xiaodong (deputy director, Shanghai Center for Disease Control and Prevention) stated that if these measures were implemented well, it would be possible to prevent a rebound from the epidemic, even sporadic.