China Eases Travel Restrictions, Lifts Flight Bans

SHANGHAI — China announced on Friday that inbound international travelers’ quarantine time would be reduced by two days, and it canceled bans for inbound flights.

According to the latest announcement from the National Health Commission, the “7+3” mandatory quarantine, which includes seven days of centralized quarantine and three days of self-isolation at home, has been shortened to five days of centralized quarantine and three days of at-home isolation.

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The release also streamlined the process for business travelers and sporting-event participants. The quarantine can be hosted within “closed loop bubbles” similar to the 2022 Beijing Winter Olympics‘ playbook, where “business affairs, training, sports competitions” can be carried out.

Searches for international flights on Qunar, one of China’s biggest online travel agencies, increased three-fold early Friday afternoon after the cancelation of the “circuit breaker” policy for international flights. The policy mandated a one-week suspension for flights that carry five COVID-19-positive passengers or 4 percent of the total flight.

For locally infected people and close contacts, the quarantine requirements were also cut from seven days to five.

Risk area categories were reduced to “High” and “Low” instead of “High,” “Medium,” and “Low.” High-risk areas, usually a single building unit, are returned to low-risk areas if no new cases occur within five days instead of seven days.

Markets rallied following the most significant relaxation of China’s “dynamic zero-COVID-19” this year. Hong Kong’s Hang Seng Index rose more than 7 percent Friday afternoon, while China’s CSI 300 Index gained almost 3 percent.

According to a Barclays report, the announcement today “provides clarity, which is essential to improve execution at local level… In particular, we expect the release today to curb excessive COVID-related controls prevalent in some Chinese cities which hurt consumer sentiment and led to widespread complaints among residents.”

Barclays expects restrictions to continue to hurt traffic and sales in the near term. “Luxury companies are still experiencing rolling lockdowns and extensive travel restrictions in the ongoing fourth quarter in China, as cases jumped in recent weeks and as China stepped up controls to prevent major outbreaks in winter,” wrote the report.

China’s National Health Commission stressed the need to stick to the COVID-zero policy, not “lie flat” and enhance “scientific” and “precise” preventions. New COVID-19 cases in mainland China reached more than 10,000 on Thursday, the highest since April.

“Around 60 percent and 70 percent of stores of Tod’s and Ferragamo are affected by travel restrictions in China, and around 10 percent of stores are closed are both companies, according to management updates this week,” Barclays noted.

As the world’s second-largest economy starts to roll out a clearer roadmap to reopening, Barclays expects a recovery in 2023.