(Bloomberg) -- China has contained its latest Covid-19 outbreak just in time for a week-long holiday starting Friday, avoiding the need for travel curbs during a crucial period of consumer spending and domestic tourism.

A cluster caused by the highly infectious delta variant in the southeastern province of Fujian is fizzling out, with no cases reported on Thursday, the first time since infections were found at a local school on Sept. 10. A separate flareup in the northeastern city of Harbin also appears to have stabilized. Infections have fallen to single digits from about a dozen a day, and are mainly among the close contacts of people who are already in quarantine. 

With community transmission disrupted and close contacts traced, the number of new cases nationwide is expected to return to zero again soon. That will likely reinforce Beijing’s adherence to the so-called Covid Zero strategy that seeks to eliminate infections, even as other highly-vaccinated countries eschew the approach and are learning to live with the virus. 

Hitting the Road

The steady decline in cases has encouraged more Chinese to consider vacations during the break, after restrictions on gathering and movement during other holidays this year impeded travel within the country, which has all but closed its international borders. 

“There is very strong urge for ‘make-up’ trips after many of the public’s summer holiday travel needs were not satisfied,” said Hou Zhengang, an official with China’s ministry for tourism and culture. “Many scenic spots have offered promotions to attract people to come,” Hou told reporters in Beijing on Wednesday.  

An outbreak in the northern province of Hebei near Beijing earlier this year led to a 41% year-on-year dip in the number of trips made during the 40-day “Chunyun” travel period, when hundreds of millions of Chinese return to their hometowns for family reunions during the Lunar New Year. Tourism was also lackluster during the three-day Mid-Autumn Festival earlier this month, when there were concerns the Fujian cluster could spread beyond the province.

China imposed sweeping curbs such as flight restrictions and targeted lockdowns when delta first breached its borders this summer. The infections, initially tied to airport cleaning staff, spread to about half of the country’s 32 provinces. Manufacturing took a hit in July and August amid tighter restrictions, and the service sector contracted. Retail sales growth also slowed last month.

The latest flareup came less than a month after that previous outbreak was contained, raising concern that Beijing would be forced to implement restrictions again and that economic growth would be impacted. 

“Given China’s ‘zero-Covid’ strategy and the potential for more infectious variants of Covid-19, any Covid resurgence could again affect the services sector in coming months,” Lu Ting, Nomura Holdings Inc.’s chief China economist, wrote in a note to clients on Thursday. 

China’s Weak Holiday Spending Shows Impact of Covid Controls

Some 500 million trips are expected to take place during Golden Week this year, down 10% from the same period a year ago. Per capita tourism revenue is also expected to drop by 10%, according to air travel consultancy Capse. Meanwhile, Beijing Capital International Airport, one of the country’s busiest, expects traffic to drop by 10% over the holiday period, compared to a year earlier. 

Mass Testing

In the latest outbreak, community transmission was quickly curtailed by measures China has honed over the course of the pandemic. 

Xiamen, a city with more than 5 million residents in Fujian, was locked down and its people mass tested. The flareup reported in northeastern city Harbin less than two weeks ago was also met with stringent curbs on movement and mass testing. Experts from China’s National Health Commission have discouraged people from traveling to Xiamen, a popular tourism destination, during the upcoming holiday. They also warned against visiting places considered medium or high-risk because of Covid infections.

While Beijing shows no signs of pivoting from its Covid Zero approach, authorities have vowed to step up efforts to detect local transmission early and control it faster so future outbreaks don’t lead to protracted battles that impact the economy.

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