Shuli Ren, Columnist

Why Shanghai’s Gentle Covid-Zero Policy Failed

Unlike Shenzhen, China’s giant financial center may have counted too much on its citizens’ sense of responsibility.

March 28, 2022 at 11:01 PM UTC

Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. A former investment banker, she was a markets reporter for Barron’s. She is a CFA charterholder.

Shanghai.
Photographer: JOHANNES EISELE/AFP

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Shanghai is China’s most important financial hub as well as the regional headquarters of global brands such as Apple Inc., Tesla Inc. and LVMH Moet Hennessy Louis Vuitton SE. Until recently, it also executed China’s “dynamic clearing” Covid policy better than the country’s other municipalities. With a staff of over 3,000 conducting contact tracing in the city of 25 million, Shanghai never had to undergo mass testing or district lockdowns. For two years, life was pretty much normal.

It is thus a shock when Shanghai announced a lockdown to conduct mass testing over eight days. This is a sharp U-turn from an official stance that had ruled out such drastic measures. What went wrong?