PSU Biweekly News Flash Friday 15 th January

PSU Bi-weekly News Flash Friday 15 th January 2021 PSU (China) Consulting CO. , Ltd.

• This Week • Covid-19 Vaccinations are Launched in mainland China Continuous local Covid-19 outbreaks resulting in sporadic high-risk areas and an increase of medium-risk areas. Mainland China reiterates strict prevention on imported cases, some of which are assessed as the origin of two local outbreaks due to longer incubation period • Mainland China strengthens prevention and counter measures in rural areas after a Covid-19 outbreak in a village in Hebei Province early January. • Hebei Province, which surrounds Beijing geographically, enforces lockdown on three cities (Shijiazhuang, Xingtai and Langfang) and imposes strict control on entries into Beijing. • China calls on people to stay in their work cities for the upcoming Chinese New Year to reduce travels amid the largest annual travel rush. • China has launched a specialized online platform and revised catalog of industries to encourage and facilitate foreign investments 2

COVID-19 • • • A hotel and its adjacent stores in Beijing’s Chaoyang District were classified as medium-risk area for nearly one month (between 19 December 2020 and 13 January 2021) after an imported case resulted in local infections. Shunyi District which reported the first local Covid-19 case on December 23 rd is the epicenter of the ongoing epidemic in Beijing. After a three-week struggle, Shunyi still has eight medium risk areas and keeps strict prevention and counter measures in place. The local transmissions in Shunyi District was attributed to an imported case who passed 14 -day quarantine in Fujian Province but was later diagnosed as a confirmed case in Beijing. 3

COVID-19 • Beijing has adopted the more accurate method of “nasopharyngeal” swab specimens instead of throat swab for nucleic acid testing for all in institutional-based isolation (centralized isolation) to strengthen control on imported cases. • The local transmissions in Dalian (Liaoning Province) was a result of cold chain workers who got infected by imported frozen food packages. • A patient has been identified as a super spreader in Dalian, infecting 11 people through a family gathering. • Some Covid-19 cases in Dalian have longer incubation period; some patients were tested positive after taking 11 nucleic acid tests, and some cases were found after six rounds of mass testing. 4

COVID-19 • Hebei Province has become the largest hotspot as the confirmed cases and asymptotic infections keep a two-digit rise since 2 January. An entire district (Gaocheng District) in the city of Shijiazhuang is classified as highrisk area. • Tens of thousands of villagers in Shijiazhuang are being entirely moved to institutional-based isolation sites (centralized isolation), and the villages will be completely disinfected. • The epidemic in Hebei Province resulted in inter-provincial spread; at least eight provinces (regions) have reported imported cases from Hebei or close contacts of Hebei confirmed cases; these provinces have tightened prevention and counter measures. 5

COVID-19 • Heilongjiang Province (NE China) declares emergency across the province after that Wangkui County reported local Covid-19 outbreak on 11 January and close contacts have spread to multiple cities in the province. An entire town (Huiqi Town) in Wangkui County is classified as high-risk area. • The fourth wave of epidemic in Hong Kong, which broke out in late November 2020, is on-going, although the daily infections drops to twodigit rate; the HK authority keeps multiple prevention and counter measures in place. • HK passed a new law on December 23 to simplify the procedure of introducing Covid-19 vaccines in an effort to tackle the ongoing wave of the epidemic. 6

COVID-19 • China’s self-developed Covid-19 vaccine injections are being conducted nationwide with more than ten million doses stated as being injected. 7

International Travel • Mainland China exercises what in practice can be considered a (temporary) suspension on entry for all foreign nationals with, at present, few exceptions. • China has upgraded the "circuit breaker mechanism" to further control the international arrivals; if five or more cases are found on a flight, it will be suspended for two weeks instead of one week as previously announced in June. If more than 10 cases, the flight suspension will be four weeks, the same as previously announced. • Beijing reiterates that inbound travelers from abroad must strictly follow the 14+7 policy (14 -day institutional-based isolation and 7 -day homebased or institutional-based medical observation). 8

International Travel • China has tightened Covid-19 test standards for travelers from US by requiring Ig. M serum antibody tests to be performed through venous blood sampling only; samples taken by finger prick are no longer acceptable starting from December 23. Both antibody and nucleic acid test reports must specify the testing methodology. • Mainland China suspends flights to and from UK from December 28 until further notice to fend off a mutated strain of Covid-19 which was first detected in UK and has been confirmed as more infectious. • Hong Kong has banned all flights from the UK starting from December 22 due to the discovery of the more infectious strain. 9

International Travel • Hong Kong has added Canada onto the list of Covid-19 high-risk places from December 25, thus increasing the list to 19 countries. • • Bangladesh, Belgium, Ecuador, Ethiopia, France, Germany, India, Indonesia, Kazakhstan, Nepal, Pakistan, Philippines, Romania, Russia, South Africa, Turkey, Ukraine, United Kingdom and United States. Macao has tightened the quarantine policy from December 21 for inbound travelers (except for from mainland China and Taiwan) by requiring 21 -day quarantine instead of the previous 14 days. 10

Domestic Travel and Logistics • Although in principle there are no restrictions on travel nationwide except from domestic high- and medium-risk areas, continuous local Covid-19 outbreaks keep resulting in places increasing restrictions on domestic travel. • High-risk area: 2 • • • Gaocheng District, Shijiazhuang, Hebei Province Huiqi Town, Wangkui County, Suihua, Heilongjiang Province Medium-risk area: 70 • • 25 in Liaoning Province (16 in Dalian City and 9 in Shenyang City) 7 in Beijing (7 in Shunyi District) 9 in Heilongjiang Province (7 in Heihe City, 1 in Suihua City and 1 in Qiqiha’er City) 29 in Hebei Province (18 in Shijiazhuang City , 10 in Xingtai City and 1 in Langfang City) 11

Domestic Travel and Logistics • Hebei Province, which surrounds Beijing and Tianjin geographically, enforces citywide lockdown on its capital city Shijiazhuang, Xingtai City and Langfang City (330 km, 400 km and 60 km south to Beijing respectively) and strictly control the entries into Beijing from these three cities. • Beijing requires 14 -day institutional-based isolation (centralized isolation) for all inbound travelers from domestic high-risk areas. • China calls on migrant workers (those who leave hometowns to other cities to work) to stay in their work cities amid the upcoming Chinese New Year holiday. • Multiple cities requires the employees of governmental bodies, stateowned institutions and state-owned companies to stay fot in the cities for Chinese New Year holiday. 12

Domestic Travel and Logistics • Beijing’s Capital International Airport and Daxing International Airport, respectively located in Shunyi District and Daxing District, maintain normal operation (domestic) amid the epidemic in Beijing. • Beijing hotels and tourism sites will not accept tourists from domestic highand medium-risk areas and from abroad amid the upcoming Chinese New Year holiday. • From January 5, those entering from Hong Kong through Shenzhen into the mainland must hold nucleic acid test report generated within 24 hours and appointment confirmation form valid on the day of customs clearance. Upon entering the mainland, they must undergo “ 14+7” quarantine. 13

Society • Beijing requires its enterprises not to call on branches or offices to Beijing for annual meetings. In principle Beijing-based governmental bodies, stateowned companies and state-owned institutions are required not to hold any kind of gatherings. • Beijing requires all newly hired employees to hold a negative nucleic acid test report within three days before the on-boarding day. Anyone who fail the nucleic acid test can be on board first after recovery. • Sichuan Province (SW China) has released guidelines to protect personal information amid Covid-19 control, requiring any state body, social organization or individual not to openly share individuals' information including name, ID card number, telephone number, home address, etc. 14

Society • Beijing has launched an upgraded version of the mobile app “Heath Kit“ by integrating nucleic acid testing, vaccination and other functions so as to make its more user friendly. • HK keeps in-person classes suspended for all kindergartens, primary and secondary students until after the Chinese New Year holiday. Only graduating students, of primary six and secondary six, are allowed to attend in-person classes or tests. 15

Business • China has launched an online platform to facilitate foreign investment as part of efforts to offset the impact of Covid-19. Foreign investors can better understand China's business environment, investment policies and specific project information via the website www. investchinaccpit. com. • China has released a revised catalog of industries including 5 G, block-chain, maintenance of high-end equipment, online education and online health services in which foreigners are encouraged to invest. The new edition will take effect from January 27. 16

Summary • Covid-19 remains a serious risk to mainland China due to continuous local outbreaks during the winter. • Continuous local outbreaks keep resulting in sporadic high-risk areas and more medium-risk areas, which imposes increasing restrictions on domestic travels. • Mainland China places stricter restrictions on international arrivals, including stricter nucleic acid sampling and longer quarantine period, to reduce the risk from imported cases. • While the Chinese New Year approaches, mainland China has begun to launch multiple prevention and counter measures, in particular, travels are not encouraged. 17

Recommendations • Businesses need to plan for restrictions in different forms on foreign nationals traveling to China likely during larger parts of 2021. • In regards to the global uncertainty on the Covid-19 situation, businesses are advised that there are likely quarantine measures in place in China well beyond first half of 2021. • Those who need to travel back to mainland China should prepare dual negative test reports (nucleic acid antibody tests, both done 48 hours before boarding) and better consult the local embassy or consulate in advance. Please note the 14 + 7 days increased quarantine. • A positive anti-body test likely mean that a person will be banned from entering China (considered a silent carrier). • Businesses need to have continuity planning in place for sudden, sporadic Covid-19 outbreaks and swift reimplementation of strict controls (short of full-scale lockdown) and consider to limit also domestic travels if not absolutely needed. • We strongly recommend to limit travelling for the upcoming Chinese New Year holiday due to the risk of local clusters that can create lock down and quarantine measures with short notice influencing work and school activities. In general people are recommended to spend time nearby their residential locations. 18

info@psuchina. com Beijing and Shanghai PSU (China) Consulting CO. , Ltd.