SHANGHAI. Some residents of Shanghai stepped out of their homes for the first time in more than two weeks on Tuesday, as the city took tentative steps towards easing a Covid-19 lockdown amid mounting worries over the economic impact of the strict curbs.

With a quarter of the population now in some form of lockdown, China's leadership is increasingly concerned about the long-term economic impact of its "zero-Covid" strategy, but it remains reluctant to risk larger waves of infection.

Shanghai said on Monday that more than 7,000 residential units had been classified as lower-risk areas after reporting no new infections for 14 days, and its districts have since been announcing which specific compounds can be opened up.

But while some people were allowed out of their residences on Tuesday, there was still confusion about the extent to which those living in lower-risk zones were free to move, with many still awaiting permission from their residential committees.

One Shanghai resident said she briefly left home for a scooter ride on Tuesday morning after receiving permission from her compound, but she was notified later in the day that she would no longer be allowed to do so.

“You know how it all changes very fast… if you can go out you better do so quickly because you won’t know if it could change in the next hour," said the resident, who didn't want to be named.

Residents from lower-risk zones known as "prevention areas" are still subject to controls and will have to observe strict social distancing measures, city health official Wu Qianyu said at a press briefing.

"After a long period of lockdown, it is understandable that people want to go out and get some air, and they need to go shopping for food and medicine and go for medical treatment," she said. "But if lots of people gather in a disorderly way, it will cause hidden dangers to our epidemic prevention work."

On Monday, Shanghai's total new asymptomatic cases fell 11% from a day earlier to 22,348, with confirmed symptomatic cases rising to 994 from 914. .

But experts said it was still too early to say whether the city was getting to grips with the outbreak - China's biggest since the coronavirus was first discovered in late 2019.

Zhang Boli, a medical expert and government adviser, said the multiple points of transmission made the current flare-ups different from previous ones.

"It might take more time than previously - it isn't easy to make predictions," he told the Health Times newspaper.

Amid concerns about the tough curbs, the US State Department has ordered its non-emergency government workers to leave its consulate in Shanghai.

Downward pressures

With the economy under increasing strain, efforts are being made in Shanghai to reopen supermarkets, convenience stores and pharmacies, but non-essential businesses will remain suspended, said Liu Min, vice head of the city's commercial commission.

Nomura estimates that as many as 45 cities in China are now implementing either full or partial lockdowns, making up 26.4% of the country's population and 40.3% of its GDP.

The figure of 45 cities may even underestimate the full impact of China's current "zero Covid" policies, with mobility disrupted elsewhere too, it added.

The economic impact has been mixed so far, according to a research report by Cinda Securities, a Chinese brokerage.

The outbreaks have added to inflationary pressures as residents hoard goods and transport restrictions erode supplies, but that has been partly offset by weaker demand as incomes decline. It said relief measures were needed urgently.

Premier Li Keqiang warned on Monday that China needed to be "highly vigilant" against further downward pressures on the economy and said the fight against Covid-19 needed to be "coordinated" with economic and social development.

China is also encouraging long-term investors to buy more equities and major shareholders of listed firms to increase their holdings when stocks slump, in a bid to stabilize a stock market rocked by the worsening Covid outbreak, the country's securities watchdog said late on Monday.

China's CSI300 index (.CSI300) fell 3.1% on Monday, the biggest drop in a month. The benchmark fell to a near four-week low early on Tuesday.