SHANGHAI, China – Shanghai further eased its gruelling, weeks-long Covid-19 lockdown on Wednesday despite a mounting official death toll and tens of thousands of daily cases.

China's largest city is ambling towards reopening as businesses and residents grow increasingly desperate over closures and food shortages.

Faced with the country's worst virus outbreak in two years, Shanghai has confined most of its 25 million people to their homes since last month, doubling down on the Communist Party's unrelenting zero-Covid approach.

But the surge, driven by the fast-spreading Omicron variant, has thwarted official efforts to avert a pandemic rebound, with more than 400,000 infections reported since March.

City authorities confirmed seven Covid-19 deaths and more than 18,000 mostly asymptomatic new cases on Wednesday, while also announcing 4 million more people had been released from the strictest version of lockdown.

Some factories have resumed operations and a total of 12 million residents previously barred from leaving their homes have in the past few days been given permission to venture outdoors.

Many are, however, still restricted to their residential compounds under an easing of the rules announced last Monday.

While Shanghai's outbreak remains small compared with parts of the world getting used to living with the virus, it has rattled China's inflexible virus response, and prompted rare glimpses of discontent usually wiped away by the "Great Firewall" of censorship.

On social media, Shanghai residents have vented about the tight movement restrictions, multiple rounds of mass testing and lack of access to food and non-Covid medical care.

Beijing insists its unrelenting Covid approach has averted fatalities and the public health crises seen in many other parts of the world.

Shanghai has confirmed just 17 official fatalities in its current outbreak, though some have questioned that tally, pointing to the low vaccination rate among China's vast elderly population.

The seven deaths reported Wednesday were, like all those previously confirmed, among patients with underlying conditions such as lung cancer and diabetes. City officials said five of the seven people were over the age of 70.

The shuttering of economic engine room Shanghai and lockdowns elsewhere have taken a heavy toll on the world's second-biggest economy, clogging supply chains and forcing businesses to halt production.

Hoping to rebuild some steam, authorities have called for a "white list" of key industries and companies that can continue production, with more than 600 firms identified for early work resumption in Shanghai.

US electric car giant Tesla "officially resumed production" on Tuesday, state media reported, after suspending work at its "gigafactory" in the city for more than 20 days.

Businesses in other Chinese regions affected by Covid lockdowns in recent weeks have also gradually resumed operations amid production and logistics backlogs, including northeastern Jilin province which announced on Tuesday that its top 500 companies were back at work.