China cracks down on price gouging amid food shortages

Chinese authorities have said they are cracking down on price gouging as food shortages due to Shanghai’s lockdown continue and fears in Beijing prompt a run on supermarkets.

It comes as social media platforms shut down the account of a high-profile critic of the government’s insistence on a traditional Chinese medicine product being rolled out to millions of residents.

On Wednesday, the Ministry of Public Security pledged any individuals taking advantage of outbreaks to make a profit would be dealt with strictly, with fines of up to 3m yuan (£363,400).

In Shanghai, one man faced administrative punishment for “fabricating and disseminating price increase information and disrupting market price orders”. The man was accused of buying produce and reselling it online at prices increased by up to 360%. Another was accused of renting someone else’s business licence and selling produce and food online at inflated prices, making $230,000 (£180,000) in profit. Last month, Shanghai’s market supervision authorities said they had already issued about 20,000 warning letters over price gouging.

In Beijing, residents have reported steep price rises in shops. Fears that the capital could head into lockdown prompted widespread stockingpiling, leading to shortages in some supermarkets, even in areas not yet designated medium or high risk.

A woman in quarantine talks with a visitor during the lockdown in Shanghai. Photograph: Alex Plavevski/EPA

“People are in an area without the epidemic, and they came back to the vegetable market today. The price of eggs has gone up, and the price of meat has gone up, and the potatoes are still there, but their value has doubled,” said one resident on Weibo. “I didn’t panic, but this is urging me to panic.”

Authorities have ordered mass testing of more than 20 million people across Beijing and suspended all weddings, funerals and banquets as they seek to head off a growing outbreak. On Thursday, the city reported 50 new cases. Authorities locked down some individual residential buildings, office blocks and a university and closed some public spaces and venues.

Across China analysts estimate that more than 340 million people are under full or partial lockdowns in 46 cities.

The southern manufacturing hub of Guangzhou cancelled hundreds of flights and ordered mass testing of about 5.6 million people after it detected one suspected case. Meanwhile, Shanghai reported its lowest daily case numbers in more than three weeks on Thursday, with 9,330 asymptomatic diagnoses. Authorities said they would make more resources available to improve vaccination rates among elderly people, but have not showed signs of lifting the lockdown.

Shanghai’s 25 million residents have been in lockdown for weeks, with major food shortages and delivery issues. Among the complaints are accusations over the government’s insistence on supplying households with millions of doses of Lianhua Qingwen – a traditional Chinese medicine (TCM) being used as a Covid-19 treatment. Residents said delivery of the unrequested doses appeared to be prioritised over food.

Grocery haul vlog shines a light on price gouging in locked-down Shanghai – video

TCM has major backing from China’s central and local governments and is among the products Beijing has donated to other countries in aid to combat Covid-19. However, Lianhua Qingwen has become controversial, with signs that criticism of it is not tolerated as authorities seek to contain expressions of dissent. Wang Sicong, a well-known figure and son of one of China’s richest men, was banned from Weibo and his account shut down on Wednesday after apparent questioning of the efficacy of Lianhua Qingwen.

In a post to about 40 million followers, Wang had asked whether the product had been approved by the World Health Organization. In a since deleted post he also reportedly urged China’s regulators to investigate the manufacturer, Shijiazhuang Yiling Pharmaceutical. Following Wang’s post shares in the company plummeted 35%, Bloomberg reported.

Last week Wang’s account was suspended, a notice saying only that it had “violated related laws and regulations”. Yiling Pharmaceutical said it would take legal action against defamatory statements. On Wednesday, it was deleted entirely.

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Wang’s posts were among the most high-profile representations of growing discontent in China, as lockdowns and harsh zero-Covid measures continue, particularly in Shanghai.

The WHO has examined TCM as a treatment, finding “promising data” that it helped reduce progression of the disease, Quartz reported. But Lianhua Qingwen is not recommended as a Covid-19 treatment, even in some places where TCM is widely used. Singapore has only approved it as a cold and flu treatment but is now running trials for Covid-19. It is banned from being imported to New Zealand, Sweden, the US and Australia.

Additional reporting by Xiaoqian Zhu and Chi Hui Lin

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