As cities across the country have been lifting localised lockdowns, China may announce 10 new nationwide easing measures as early as Wednesday, two sources with knowledge of the matter told Reuters.
That has sparked optimism among investors for a broader reopening of the world's second biggest economy that could boost global growth.
Despite reassurances from authorities, commuter traffic in major cities, such as Beijing and Chongqing, remains at a fraction of previous levels.
Some people are wary of catching the virus, especially the elderly, many of whom remain unvaccinated, while there is concern about the strain the loosening could put on China's fragile health system.
China has reported 5,235 COVID-related deaths so far this month, but experts have warned that the death toll could rise above 1 million if the exit is too hasty.
Analysts at Nomura estimate that areas now under lockdown equate to 19.3 per cent of China's total GDP, a decline from 25.1 per cent last Monday.
This marks the first decline in the Nomura's closely watched China COVID 19 lockdown index since the beginning of October.
The dangers posed by the virus are downplayed by officials.
According to Chinese state television, Tong Zhaohui, director of the Beijing Institute of Respiratory Diseases, said on Monday that the latest Omicron variant of the disease had caused fewer cases of severe illness than the 2009 global influenza outbreak.
China's management of the disease may be downgraded as soon as January to the less strict Category B from the current top-level Category A of infectious disease, according to a report from Reuters on Monday.
The most difficult period has passed, the official Xinhua news agency said in a commentary released late on Monday, citing the weakening pathogenicity of the virus and efforts to vaccine 90 per cent of the population.
Analysts predict that China may re-open the economy and drop border controls sooner than expected next year, with some saying it will be fully open in spring.
Over half of Chinese people say they will put off travel abroad, for periods from several months to more than a year, even if borders are reopened tomorrow, a study showed on Tuesday.
A survey of 4,000 consumers in China by Oliver Wyman found that the fears of infection with the disease was the top concern of those who said they would postpone travel.