This map shows the latest Covid outbreak in mainland China

• Parts of mainland China have reported a resurgence in daily Covid-19 cases over the last few weeks as the highly infectious delta variant spreads across the country.
• Locally transmitted cases reported in mainland China climbed to 878 so far this month — compared with 390 cases for the entire July, according to CNBC's tally of China's official daily data.
• The latest resurgence in Covid cases comes as some economic growth engines continue to lose momentum, while domestic consumption struggles to fully recover, said HSBC economists.

New pockets of Covid-19 cases have emerged in parts of mainland China in the last few weeks as the highly infectious delta variant spreads across the country.

So far this month, locally transmitted cases reported in mainland China have climbed to 878 — more than double the 390 cases recorded for the entire month of July, according to CNBC's tally of daily data by China's National Health Commission.

To be clear, the number of reported infections in China is much lower than many countries — including the U.S. where new cases have averaged around 100,000 a day, and in Southeast Asia where daily cases have risen sharply.

Still, Chinese authorities have imposed targeted lockdowns, tightened movement controls, and ordered mass testing to curb the latest resurgence in Covid cases.

In the eastern province of Jiangsu, where most recent reported cases were concentrated, residents of Yangzhou city have reportedly gone through six rounds of Covid testing. Chinese state media said the city accounts for most of the Covid infections in Jiangsu province.

Impact on China's economy

Economists have raised concerns about China's zero tolerance for Covid. The government has been insistent on stamping out any flare-ups in Covid cases, even as many countries globally — including the U.K. and Singapore — have started to accept that the virus will never go away.    

The latest resurgence in Covid cases in China comes as some economic growth engines continue to lose momentum, while domestic consumption struggles to fully recover, HSBC economists said in a Wednesday report.

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The economists noted that the number of new infections reported in China has been the highest since an outbreak in northern China in December 2020.

"As such, many provinces and cities have tightened their social-distancing restrictions, and issued cross-city and cross-province travel bans," they said in the report.

"These measures will inevitably weigh on growth, especially domestic consumption which has yet to see a full recovery back to the pre-pandemic levels," the analysts said.

HSBC said mounting economic pressure could prompt Beijing to implement a more "supportive" fiscal policy. That could include larger infrastructure spending, and tax cuts for small- and medium-sized companies, said the bank.

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