China's COVID-19 policy in flux

BEIJING (Reuters) - China is set to announce new measures to further ease some of the world's toughest COVID-19 curbs as early as Wednesday, sources told Reuters, with investors cheering the prospect of changes after widespread protests and mounting economic damage.

The zero-COVID policy to stamp out transmission has become a global outlier as most countries seek to live with the disease, but 20 new measures to streamline controls came last month, amid rising public frustration.

After November's rare widespread protests across more than 20 cities, crucial planks of the policy, such as some compulsory tests, and even messaging on the deadliness of the virus, are changing.

Here are questions and answers about a key turning point in President Xi Jinping's signature policy:

IS CHINA ABANDONING ZERO-COVID?

Not yet, but it is making incremental adjustments, easing testing requirements and quarantine rules.

Changes varying by location have taken place even in cities such as southern Guangzhou and Beijing, the capital, despite recent record infections.

Officials told local governments not to use an earlier "one-size-fits-all" approach. Rather, cities have been closing off apartment buildings and single compounds after cases were found, instead of portions of city blocks.

More changes could come as early as Wednesday, Reuters has reported.

WHY MAKE CHANGES NOW?

Public fatigue with zero-COVID is growing, and a surge that triggered lockdowns in numerous cities last month, often unannounced, saw the anger boil over.

At the same time, the world's second-largest economy is being hammered by curbs that have squeezed consumption and travel and disrupted factory output and global supply chains.

The 20th Congress of the ruling Communist Party in October, where Xi secured a third five-year leadership team, had been seen as a milestone that could lead to an unwinding of the policy.

WHAT IS CHINA DOING TO PREPARE FOR EASING?

It recently announced efforts to boost vaccination among its vast elderly population. Some cities have rolled out a new inhalable COVID vaccine booster from CanSino Biologics.

But many experts have said China has not done enough.

It has not approved foreign mRNA vaccines that are more effective against COVID-19. A top U.S. intelligence official said Xi is unwilling to accept Western vaccines.

Some experts urge more vaccine booster doses and beefed up health services, as herd immunity is low after the virus was largely kept at bay during the pandemic's first two years.

Forecasts of deaths after eventual re-opening range from 1.55 million to more than 2 million, depending on vaccination levels and health care preparedness.

Yet the current tally of 5,235 COVID-related deaths is a tiny fraction of China's population of 1.4 billion, and extremely low by global standards.

HOW HAVE THE PUBLIC REACTED TO THE CHANGES?

With relief and worry. Many, especially in big cities, frustrated by the inconvenience, uncertainty, economic toll and travel curbs accompanying zero-COVID, would welcome its end.

But others, including the elderly, worry about the costs of a wide outbreak. Fear of the disease runs deep after heavy-handed control measures, while state media have played up deaths and chaos elsewhere, especially the United States.

The recent rule changes and their patchy application have also confused many.

WHAT DOES THIS MEAN FOR FULL RE-OPENING?

China has all but shut its borders to international travel for nearly three years. International flights are still at just a fraction of pre-pandemic levels and arrivals face eight days in quarantine.

Many analysts have said significant re-opening will only begin in March or April, after the winter flu season and the annual session of parliament that usually starts on March 5.

Bank Goldman Sachs said it expects gradual re-opening from April.

But Julian Evans-Pritchard, a senior China economist at Capital Economics, said a move away from zero-COVID was unlikely even in 2023, citing low vaccination rates for the elderly, among other factors.

JPMorgan analysts have warned the path to re-opening is likely to be bumpy.

(Reporting by Beijing and Shanghai newsroom, Writing by Bernard Orr; Editing by Clarence Fernandez)