Traffic, pedestrians and joggers have reappeared on the streets of Shanghai as China's largest city begins returning to normalcy amid the easing of a strict two-month Covid-19 lockdown.

The measures had drawn unusual protests over their heavy-handed implementation by authorities.

Shanghai's Communist Party committee, the city's most powerful political body, issued a letter online proclaiming the lockdown a success and thanking citizens for their "support and contributions".

The move came amid a steady rollback in compulsory measures that have upended daily life for millions while severely disrupting the economy and global supply chains.

Although it has defended President and Communist Party chief Xi Jinping's hardline "zero-Covid" policy, the country's leadership appears to acknowledge the public backlash against measures seen as trampling on already limited rights to privacy and participation in the workings of government.

In one such step, the cabinet's joint prevention and control mechanism issued a letter on Tuesday laying out rules banning "non-standard, simple and rude indoor disinfection" by mostly untrained teams in Shanghai and elsewhere that have left homes damaged and led to reports of property theft.

Full bus and subway services in Shanghai were restored from Wednesday, with rail connections to the rest of China to follow.

However, more than half a million people in the city of 25 million remain under lockdown or in designated control zones because virus cases are still being detected.

The government says all restrictions will be gradually lifted, but local neighbourhood committees still wield considerable power to implement sometimes conflicting and arbitrary policies.

Negative PCR tests for the coronavirus taken within the previous 48 to 72 hours also remain standard in Shanghai, Beijing and elsewhere for permission to enter public venues.

That measure did not deter people in Shanghai from gathering outside to eat and drink under the watch of police deployed to discourage large crowds from forming.

Schools will partially reopen on a voluntary basis, and shopping malls, supermarkets, convenience stores and drug stores will gradually reopen at no more than 75% of their total capacity. Cinemas and gyms will remain closed.

Health authorities on Wednesday reported just 15 new Covid-19 cases in Shanghai, down from a record high of around 20,000 daily cases in April.

A few malls and markets have reopened, and some residents have been given passes allowing them out for a few hours at a time.

The lockdown has prompted an exodus of Chinese and foreign residents, with crowds forming outside the city's Hongqiao Railway Station, where only some train services have resumed.

Even while the rest of the world has opened up, China has stuck to a "zero-Covid" strategy that requires lockdowns, mass testing and isolation at centralised facilities for anyone who is infected or has been in contact with someone who has tested positive.

The country's borders also remain largely closed and the government has upped requirements for the issuance of passports and permission to travel abroad.