The state-run media reported that the Covid-19 outbreak in the city and prolonged lockdown have stretched aged-cared and medical facilities to a breaking point in Shanghai which has seen stringent coronavirus curbs in April.
The municipal government has confirmed the incident and launched an investigation while four people, including the director of the nursing home and three officials from the district civil affairs bureau and social development office were suspended for dereliction of duty.
While the nursing home has issued an apology, reports said the incident has triggered widespread anger and condemnation.
Shanghai is now in its fifth week of lockdown, while the reported Covid numbers are still lingering in the thousands.
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Restrictions and isolation mandates for positive cases which are a part of the government's 'zero-COVID' policy have created havoc in the city of 25 million people.
Over 400 deaths in the latest reports were reportedly elderly people with co-morbidities. Reports also suggest that nursing homes were not reporting deaths.