(Bloomberg) -- The less-lethal omicron variant is now the prevalent Covid-19 strain in China, President Xi Jinping told European Council President Charles Michel at their meeting in Beijing on Thursday, according to a European official.

The latest version of Covid is not like the much stronger Delta variant, Xi was cited as saying by the European Union official, who was briefed on the meeting and asked not to be identified discussing private matters. Xi didn’t indicate explicitly to Michel his government plans to ease up on virus curbs, the official added.  

Still, if confirmed, this would mark the first time Xi has publicly acknowledged that the virus is weakening, and suggest the leadership in China could be moving toward further loosening its strict “Covid Zero” policies of the past three years. On Wednesday, the nation’s top official in charge of the fight against the pandemic said efforts to combat the virus were entering a new phase via the omicron variant and with more Chinese getting vaccinated, a sign that Beijing may yet seek to amend its strategy. 

Beijing will now allow some people infected with the virus to isolate at home, starting with residents of the city’s most-populous district. Operators of buses and subways in China’s capital have also been warned not to reject passengers on the basis of not having negative Covid test results within 48 hours.

The Chinese embassy in Washington doesn’t have more information about the meeting between Xi and Michel other than the official readout, spokesman Liu Pengyu said when asked about the EU comments. That readout did not cite Xi as making the remarks on omicron.

“This looks like another sign that China is laying groundwork for an exit from Covid Zero,” said Gabriel Wildau, managing director at advisory firm Teneo Holdings LLC in New York. “For Xi and the rest of the party leadership, it’s important to signal both domestically and internationally that any shift is based on public health considerations, not political pressure from street protests. 

China is considering rolling out a fourth round of Covid vaccines, Bloomberg News reported on Wednesday, citing people familiar with the matter. Officials are making plans for the rollout, though a final decision on timing and vaccine candidates is yet to be made, the people said. Authorities also aim to have 90% of people over 80 vaccinated with at least one Covid shot by the end of next month, Caixin reported Thursday.

It remains to be seen whether the softening tone from Beijing will mollify protesters, who took to the streets of multiple Chinese cities in the dozens -- or in some cases hundreds -- last weekend in opposition to the strict Covid policies. Further demonstrations have mostly been thwarted in the past week by a heavy police presence.

Xi also told Michel that demonstrators seen days ago in several major cities across the country were “mainly students and teenagers” frustrated with the pandemic, according to the EU official. 

Reopening hopes are buoying Chinese assets across the board. The country’s rules are still the most onerous in the world, with targeted lockdowns and testing efforts causing disruption. 

“Given all the propaganda efforts previously devoted to justifying harsh restrictions by highlighting the risk from Covid, any policy change now must be matched with corresponding messaging to explain the shift,” Teneo’s Wildau added. “If the change seems arbitrary, the public might question whether the last three years of sacrifice were necessary.” 

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