Markets seemed to greet China’s policy shift with apprehension. Shares in Hong Kong and mainland China fell Wednesday, suggesting that investors still see a messy path toward reopening, including the potential risks of soaring infections.

Chinese stocks have seesawed as Beijing has sent mixed signals on the pace of opening, and economists have been divided on the impact on spending and other economic activity.

Chinese leader Xi Jinping and other senior officials have repeatedly emphasized the need to maintain the zero-Covid policy and criticized the West’s approach of living with the virus as showing a disregard for lives. But the official tune began to change last month, after signs of economic and supply-chain disruptions again emerged and protests erupted in dozens of major cities. Covid-related disruptions at the world’s biggest iPhone assembly plant led Apple Inc. to question whether it can still rely on China as its biggest manufacturing base.

Health officials and state media have recently suggested it is now possible to relax controls, citing new research showing the latest strains of the virus are less deadly, though they spread more easily. Better techniques to control and treat Covid mean China can apply more nimble and precise measures that have less impact on people’s lives and economic activity. …

The new rules bar officials from arbitrarily locking down neighborhoods and from shutting businesses—but the apartments or buildings where infections are found will continue to be placed under lockdown. Covid patients with mild or no symptoms and their close contacts will be allowed to isolate at home instead of being shipped to government quarantine facilities.

Most requirements for virus testing and the scanning of health QR codes when entering premises will be scrapped, except for places deemed vulnerable such as nursing homes, nurseries or schools. Domestic travelers will no longer need to present a negative virus test or have their health codes checked when arriving in another province. …

As China relaxes Covid controls it is unlikely to see any immediate rebound in the country’s slowing economy, analysts say. Mobility could plunge as infections surge, as was the case in Hong Kong and Taiwan, where people avoided going out to minimize risk of infection. “Policy and mobility may diverge” during reopening and hurt growth, Goldman Sachs analysts wrote in a note Sunday.

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(Excerpt from The Wall Street Journal. Photo Credit: Getty Images)