The city of 25 million people has been under a two-month-long lock-up, and authorities have begun to dismantle fencing around housing compounds and remove police tape from public squares.

There was a sense of wariness and anxiety among the residents who were allowed out of their compounds for brief walks on Monday evening.

For the past two months, most will be stuck indoors until midnight, as they have been for the past two months under a brutally enforced lock down that has caused income losses, stress and despair to millions of people.

The city's manufacturing and export-laden economy has been battered by the isolation and has been the cause of public anger and rare protests.

When the passes issued by residential buildings for people to go out for a few hours will no longer be valid on Wednesday, life will return to normal.

It's hard to believe that I'm going back to work, said resident Joseph Mak, who works in education.

A resident gets haircut on a street in Shanghai.

A resident gets haircut on a street in Shanghai. Photograph: Aly Song/Reuters

Only those in low-risk areas are affected by the easing of curbs. People in those areas are discouraged from gathering because they have to wear masks. Dining inside restaurants is not allowed. Shops are able to operate at 75% capacity. Gyms will open later.

People will have to take Covid tests every 72 hours to enter public venues. Anyone who tests positive will still have to go through a tough scurvy program.

China is one of the few countries that has an uncompromising zero Covid policy that aims to eradicate all outbreaks as soon as possible. It is not known if frequent testing can keep Omicron under control.

Todd Pearson is the managing director of the Camel Hospitality Group, which operates eight restaurants, four bars and three gyms in China.

The restaurants are only allowed to do deliveries for 5% of their revenue, not enough to pay salaries and rent. The workers who have been sleeping in the restaurants can finally go home from midnight.

Pearson is hopeful that they will rush things along quickly to restart the economy. I don't think many businesses or people could handle that much more.

Economic activity in China rebounded in May from a dismal April as Covid curbs in major manufacturing hubs were gradually relaxed, although movement controls still depressed demand and restrained production.

In May, factory activity was at a three-month high, but it was down from a year earlier.

The British Chamber of Commerce warned in its annual position paper that Covid restrictions and uncertainty about the future were having a negative impact on British companies in China. A survey of more than 600 members found that almost 50% of them were delaying planning investments because of Covid zero policies.

The chair of the chamber said that all they can expect is more uncertainty, disruption and possibly more lockdowns as China continues with its zero- Covid targets.

There is a lot of concern that something could happen again in the current environment.

The report found that 42% of member companies were facing challenges, including hiring foreign talent, and 23% had a net decrease in foreign staff. It said that 42% of their staff will leave within a year.

There were 31 cases for 30 May, down from 67 a day earlier.

The report was also contributed to by the news agency.