China says it will resume issuing ordinary visas and passports in another big step away from anti-virus controls that isolated the country for almost three years, setting up a potential flood of millions of Chinese going abroad for next month's Lunar New Year holiday.

The announcement Tuesday adds to abrupt changes that are rolling back some of the world's strictest anti-virus controls as President Xi Jinping's government tries to reverse an economic slump. Rules that confined millions of people to their homes kept China's infection rate low but fueled public frustration and crushed economic growth.

The latest decision could send an influx of free-spending Chinese tourists to revenue-starved destinations in Asia and Europe for Lunar New Year, which begins January 22. But it also presents a danger they might spread Covid-19 as infections surge in China.

China stopped issuing visas to foreigners and passports to its own people at the start of the Covid-19 pandemic in early 2020.?

The National Immigration Administration of China said it will start taking applications January 8 for passports for tourists to go abroad. It said it will resume issuing approval for tourists and businesspeople to visit Hong Kong, a Chinese territory with its own border controls.

The agency said it will take applications for ordinary visas and residence permits. It said the government will "gradually resume" allowing in foreign visitors and gave no indication when full-scale tourist travel from abroad might be allowed.

Health experts and economists expected the ruling Communist Party to keep restrictions on travel into China until at least mid-2023 while it carries out a campaign to vaccinate millions of elderly people. Experts say that is necessary to prevent a public health crisis.

During the pandemic, Chinese with family emergencies or whose work travel was deemed important could obtain passports, but some students and businesspeople with visas to go to foreign countries were blocked by border guards from leaving. The handful of foreign businesspeople and others who were allowed into China were quarantined for up to one week.

Before the pandemic, China was the biggest source of foreign tourists for most of its Asian neighbours and an important market for Europe and the United States.

The government has dropped or eased most quarantine, testing and other restrictions within China, joining the United States, Japan and other governments in trying to live with the virus instead of stamping out transmission.

Japan and India responded to China's surge in infections by requiring virus tests for travellers from the country. US officials, speaking on condition of anonymity to relate internal discussions, said Washington is considering taking similar steps.

On Monday, the government said it would scrap quarantine requirements for travellers arriving from abroad, also effective January 8. Foreign companies welcomed the change as an important step to revive slumping business activity.

Business groups have warned global companies were shifting investment away from China because foreign executives were blocked from visiting.

The American Chamber of Commerce in China says more than 70 per cent of companies that responded to a poll this month expect the impact of the latest wave of outbreaks to last no more than three months, ending in early 2023.

The government has stopped reporting nationwide case numbers but announcements by some cities indicate at least tens and possibly hundreds of millions of people might have been infected since the surge began in early October.

The outbreaks prompted complaints Beijing relaxed controls too abruptly. Officials say the wave began before the changes.

China only counts deaths from pneumonia or respiratory failure in its official Covid-19 toll, a health official said last week. That excludes many deaths other countries would attribute to Covid-19 .

Experts have forecast 1 to 2 million deaths in China through the end of 2023.

Also Monday, the government downgraded Covid-19 from a Class A infectious disease to a Class B disease and removed it from the list of illnesses that require quarantine. It said authorities would stop tracking down close contacts and designating areas as being at high or low risk of infection.?