SHANGHAI (BLOOMBERG) - Shanghai's leader declared victory in defending the financial hub against Covid-19. He described the two-month lockdown that confined millions of people to their homes and spurred sporadic unrest as "completely correct".

Shanghai "broke the repeated stalemate of the epidemic, realised and consolidated the fruits of dynamic clearance in society, and won the battle to defend Shanghai," Mr Li Qiang said at the city's Communist Party congress on Saturday (June 25), echoing triumphant claims in state media earlier this month.

Mr Li also gave credit "to the important instructions of General Secretary Xi Jinping".

Shanghai eased more of the rules that have curtailed normal daily activity since late March, announcing plans to let restaurants in some areas deemed lower risk resume dine-in services this week.

The city reported just four local cases for Sunday, with two found outside quarantine.

Shares of liquor stocks advanced Monday after the announcement about eateries in the city of 25 million people, helping the consumer staples subgauge rise 2.3 per cent, among the best performers on the CSI 300 Index.

Tsingtao Brewery Co, Wuliangye Yibin Co and Luzhou Laojiao Co all rose at least 3.8 per cent.

The fate of Mr Li, a 62-year-old who once served as a top aide to the president, is being closely watched ahead of a Communist Party meeting later this year at which Mr Xi’s expected to secure a third term in office.

The question is whether Mr Li will get a seat on the seven-member Politburo Standing Committee, the ruling party’s most powerful body, possibly even as premier. 

All but one Shanghai party secretary has made it to the top body since 1987, with former Premier Zhu Rongji and Mr Xi himself among those to advance.

Should Mr Li fail to make the body, it may be an indication that Mr Xi – the most powerful leader in China in decades – was unable to promote him given his handling of the Shanghai outbreak.

The desperate scenes in Shanghai presented the biggest crisis for China’s Communist Party since the virus emerged in Wuhan, triggering the world’s first lockdown.

Throughout the early days of the pandemic, the financial hub had taken a looser approach to containing Covid-19, and initially resisted a lockdown when cases flared again earlier this year.

But it soon became clear the outbreak was widespread, necessitating more measures.

Residents weren’t allowed to leave their homes to buy food or seek medical care during much of the two-month lockdown, prompting some of the most high-profile protests in years against China’s government to erupt in housing compounds and social media. 

Mr Li himself faced criticism from many in Shanghai for his handling of the lockdown.

In one incident, he was stopped by a woman in a wheelchair during a public visit who scolded the government for failing to provide enough food.  

Following Shanghai’s experience, Beijing began to move faster and earlier in other cities locking down individual neighbourhoods and apartment blocks over one or two cases.

The government is also investing more in its testing regime, building permanent PCR testing infrastructure in places like the capital and Shanghai, and making negative results a requirement to enter shopping malls, office buildings and even public parks.  

Beijing is also taking more steps towards resuming normal life, with in-person classes for primary and middle schools set to resume on Monday.

Mr Li Yi, a spokesperson for the city’s education commission, said at a press briefing that two months of remote learning were increasingly causing "problems" for students, including psychologically. Beijing reported four local cases Sunday.  

Nevertheless, tension remains high in the capital with residents fearful of renewed curbs.

While Beijing never entered a full-blown lockdown like Shanghai, the population was placed under rules for months. 

The depth of public unhappiness with Covid+19 controls was revealed in a curious incident on Monday, in which state-backed Beijing Daily appeared to cite municipal party chief Cai Qi saying that the city would stick to a stringent zero-tolerance approach for the next five years. 

The reference to “five years” was swiftly deleted from the report after backlash on social media platforms erupted.

A video of Mr Cai’s remarks showed he did not say Covid-19 controls would be in place for the next five years; he mentioned virus policy as part of a broad presentation of the Beijing local government’s plans for the next five-year development period. 

Mr Hu Xijin, former editor of the Communist Party’s Global Times newspaper, said the report’s revision was appropriate, adding that “no one hopes that Beijing will go through the next five years like what it’s been like the first half of this year”. Beijing will continue to explore more efficient virus prevention measures and consolidate public confidence, Hu wrote on his Weibo account.

The city of Dandong, which borders North Korea, warned of a persistent risk of new Covid-19 flareups as it gradually opens up from a weekslong lockdown. The city reported six asymptomatic cases Sunday.  

A local disease control official said there was no clear origin for most of the cases in the current wave, which started May 24.

The official added that Dandong will carry out mass testings for all residents twice a week, according to a post on the city’s official WeChat account.  

Authorities in the gaming hub of Macau extended the suspension of public sector activities, except for emergency services, until at least July 1, according to a statement on the city government’s website.

It reported 261 cases in the current outbreak and said a third round of mass testing was planned for Monday and Tuesday.