China's financial hub Shanghai has unveiled more post-lockdown plans as it moves towards a return to normality, but a nationwide economic recovery is still a distance away.

China's biggest city by economic output is home to 25 million residents and has suffered from the lockdown imposed in early April which has seen business disruptions, mass testing and mobility restrictions on vast swathes of the population.

Other cities not under lockdown but still restricted by Covid curbs, including Beijing, have also struggled, with the highly transmissible Omicron provoking stronger responses from health authorities this year.

With the government refusing to loosen its zero-tolerance stance for a long period of time, Shanghai is set to finally emerge from its lockdown on 1 June after new infections fell sharply.

Some of the city's restrictions have recently eased as cases dwindle, though much of the population is still not allowed to venture outside for more than a few hours a day at most.

City officials said that students in junior and senior high school could return to offline classes from 6 June, following word earlier in the week that shopping malls and department stores would be allowed to reopen in batches from 1 June.

Schoolchildren in Shanghai will gradually resume some in-person classes in June with daily Covid-19 tests.

Children attending the last two years of high school will return to schools across the city on 6 June and will be joined a week later by students in the final grade of middle school, while all other students are to remain at home attending online classes.

"We will ensure that students get swabbed on campus after school every day," with results from their PCR tests available by the next morning, the health minister said.

People play badminton on Beijing streets after many parks and facilities were closed

China's capital Beijing recorded 36 new symptomatic coronavirus cases for yesterday, down from 41 a day earlier, the government said with asymptomatic cases rising to nine cases from six the previous day.

Authorities have turned their attention to the low vaccination rate among China's elderly population, which has long a weak point in the country's defence against the virus.

Officials have ramped up incentives for older people to get jabbed, including one neighbourhood near Beijing's Temple of Heaven which is dangling as much as 1,000 yuan (€138.75) in gift cards for residents aged over 80 who get their first shot.

As the focus turns to recovery, Premier Li Keqiang offered a grim view of the world's second-biggest economy, saying the difficulties it faces in some aspects were even greater than in 2020, when China was hit by the first Covid-19 outbreak.

People with two hour passes to go beyond their compounds celebrate with champagne in the Jing'an district of Shanghai

Economic impact

Many private-sector economists expect gross domestic product to contract in April-June from a year earlier versus the first quarter's 4.8% growth.

China will strive to achieve "reasonable" GDP growth in the second quarter, government officials were told in an online conference.

Underlining the tension between economic and Covid policies and the sensitivity surrounding their discussion, social media sharing of state television reports on the teleconference was intermittently blocked on China's heavily policed internet.

Some online groups on China's popular WeChat mobile app also forbade the sharing of unverified transcripts (audio or written) from the conference as well as discussion about the event, fearing suspension of their accounts.

The central bank said it would promote more credit for smaller firms and urged financial institutions to prioritise lending to central and western regions, as well as areas and sectors impacted by Covid-19 outbreaks.

The finance ministry also said it would offer subsidies to Chinese airlines from 21 May to 20 July to help them weather the coronavirus-induced downturn and higher oil prices.

Domestic air traffic has plummeted because of lockdowns in Shanghai and surrounding cities.

Shanghai-based China Eastern said passenger numbers sank 90.7% in April from a year earlier.

Offering a glimmer of hope, the China Passenger Car Association said that national vehicle sales rose 34% in the first three weeks of May compared with the corresponding period in April.

But, with measures to control Covid outbreaks depressing incomes, the sales volume was still 16% lower than 12 months earlier, the industry association cautioned.

Road freight transportation and express delivery from distribution centres last week were both stronger than a month earlier but still down sharply on the year, Nomura Global Economics said.

"As long as China does not relax its Covid policy, any other policy measures are of little value right now," said an automotive fastener factory owner surnamed Zheng in the eastern province of Zhejiang.

"Everybody has little confidence or enthusiasm to invest now."