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China braces for ‘new phase’ as COVID-19 curbs ease despite surge in cases

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China braced for a “new phase” in its battle against COVID-19 on Monday and financial markets strengthened after Beijing dropped pandemic border controls in the latest easing of curbs that has let the virus loose on its 1.4 billion population.

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Sunday’s reopening is one of the last steps in China’s dismantling of its “zero-COVID” regime, which began last month after historic protests against curbs that kept the virus at bay for three years but caused widespread mental agony and severe damage to the world’s second-largest economy.

While Beijing’s move to drop quarantine is expected also to boost outbound travel, several nations are demanding negative tests from visitors from China, seeking to contain an outbreak that is overwhelming many of China’s hospitals and crematoriums.

“Life is moving forward again!,” the official newspaper of the Communist Party, the People’s Daily, wrote in an editorial praising the government’s virus policies late on Sunday which it said had moved from “preventing infection” to “preventing severe disease”.

“Today, the virus is weak, we are stronger.”

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China’s state Xinhua news agency said the country had entered a “new phase” of its COVID response, citing its virus prevention experience, the development of the epidemic and increased vaccination levels.

China’s top health officials and state media have repeatedly said COVID-19 infections are peaking across the country, and they are playing down the threat now posed by the disease.

That is in stark contrast to the earlier regime of strict quarantines and lockdowns as China managed the virus as a “Category A” disease like the bubonic plague and cholera. China’s management of COVID-19 was technically downgraded to “Category B” on Sunday, although many curbs have been dropped for weeks.

Officially, China has reported just 5,272 COVID-related deaths as of Jan.8, one of the lowest rates of death from the infection in the world.

But the World Health Organization has said China is under-reporting the scale of the outbreak and international health experts estimate more than one million people in the country could die from the disease this year.

Shrugging off those gloomy forecasts, investors are betting that China’s reopening will help revive the $17 trillion economy and bolster the outlook for global growth.

Those hopes lifted Asian shares to a five-month high on Monday while China’s yuan firmed to its strongest level against the dollar since mid-August. Chinese blue chips added 0.4 percent, while Hong Kong shares climbed 1.4 percent.

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