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By Andrew Galbraith and David Stanway

SHANGHAI, March 28 (Reuters) - China's financial hub of Shanghai launched a two-stage lockdown of its 26 million people on Monday, closing bridges and tunnels, and restricting highway traffic in a scramble to contain surging COVID-19 cases.

The snap lockdown, announced by Shanghai's city government on Sunday, will split the city in two roughly along the Huangpu River for nine days to allow for "staggered" testing. It is the biggest COVID-related disruption to hit the city.

The order marks a turnaround for the city government, which as late as Saturday denied that Shanghai would be locked down as it pursued a more piecemeal "slicing and gridding" approach to try to rein in infections.

Wu Fan, a member of Shanghai's expert COVID team, told a briefing recent mass testing had found "large scale" infections throughout the city, triggering the stronger response.

"Containing the large scale outbreak in our city is very important because once infected people are put under control, we have blocked transmission," she said, adding that testing would be carried out until all risks were eliminated.

A record 3,450 asymptomatic COVID cases were reported in Shanghai on Sunday, accounting for nearly 70% of the nationwide total, along with 50 symptomatic cases, the city government said.

Nationwide, there were 5,134 new asymptomatic and 1,219 symptomatic cases on Sunday,the health authority said in its regular bulletin.

DISRUPTIONS

As a major engine of China's economy, Shanghai has been trying to heed President Xi Jinping's call to minimise the impact of COVID controls on businesses and people's lives.

Wu told a briefing on Saturday that Shanghai could not be locked down for long because of the important role it played in the national and even global economy.

But following Sunday's about-turn, mass testing has disrupted transport, healthcare and a wide range of economic activities, with citywide land sales also halted on Monday.

Shanghai's Public Security Bureau said it was closing cross-river bridges and tunnels, and highway tollbooths concentrated in the city's east until April 1.

Areas to the west of the Huangpu River will have similar restrictions imposed from April 1 to April 5.

The bureau said traffic controls would be implemented on highways into and out of the city, and people leaving would have to show proof of negative results from nucleic acid tests taken within the previous 48 hours.

The city government said on Sunday it would suspend public transport, including ride-hailing services, in locked down areas. It also ordered the suspension of work at firms and factories, with the exception of those offering public services or supplying food.