China’s “Zero COVID” policies are still in effect, and are still disrupting regular economic activity in major cities and across the country. But these restrictions are now being applied with more local autonomy and less central direction, leading to a patchwork of controls—some easing, and some tightening. As a result, freight and passenger traffic volumes have improved since early May, but recoveries in investment and consumer activity remain tepid given the uncertainties concerning future outbreaks and the potential for new restrictions.
