The Chinese city of Shanghai, the country's economic centre and a global trade hub, has eased Covid curbs after a two-month lockdown.

At midnight local time (16:00 GMT Tuesday), restrictions were relaxed to allow most people to move freely around the city of some 25 million people.

But at least 650,000 residents will remain confined to their homes.

China's overall policy of "zero Covid" remains in place and people catching Covid face quarantine or hospital.

Their close contacts also face the prospect of removal to quarantine and the area immediately around where they live being locked down again.

"This is a day that we dreamed of for a very long time," Shanghai government spokeswoman Yin Xin told reporters.

"Everyone has sacrificed a lot. This day has been hard-won and we need to cherish and protect it, and welcome back the Shanghai we are familiar with and missed."

But new rules have been introduced, with residents required to show a green health code on their smartphone to leave their residential compounds and to enter most places.

Those who want to use public transport or enter banks or malls must have a negative PCR test certificate valid in the last 72 hours. And restrictions on leaving Shanghai remain, with anyone travelling to another city facing quarantine of seven to 14 days upon their return.

Cinemas, museums and gyms remain closed. Most children will also not return to face-to-face schooling.

But the rules did little to temper the relief people felt. Cheers and sounds of jubilation rose as the clock struck midnight on Tuesday, signalling the end of the lockdown. Groups of Shanghai residents gathered on street corners, singing and toasting with drinks as they welcomed their newfound freedom.

"We were locked down too many days. We need to celebrate. Not just me - all the Shanghai people here," one resident told the BBC. "All the bad things [have] gone past, so tomorrow will be fine."

"We are free. I am so happy, I want to work. I want to work tomorrow," said another.

Chinese state media however downplayed the news of people celebrating because authorities had so far been reluctant to define the restrictions as a "lockdown".

State media reports instead described Wednesday as "a new start" and the day of "getting back to normal life, work and production".

Cautious signs of life appeared to be returning to the city as a basic service resumed on public transport, and shops opened, with larger ones operating at 75% capacity.

Men in buttoned down shirts walked into flashy office towers - but not in the same numbers as before the outbreak, with many firms enforcing a staggered return to work.

Joggers, cyclists, skaters and dog walkers defied the muggy heat to take over riverfront parks for a much-awaited breath of fresh air.

It was supposed to last just nine days -a staggered lockdown to lessen the impact on Shanghai's economy, state media said.

It lasted 65 days. It crippled the city and scarred its people.

Restrictions are now being eased as quickly as they were imposed. There's no gradual process over several weeks. Instead there's a big bang - one day when most of the emergency rules and regulations are simply being lifted.

The relief is immense - for generations of some families who've lived together behind a locked front door for more than two months; for workers who've lived in tents inside factories where they've carried on working; for the shop and restaurant owners whose livelihood ground to a halt; for the thousands of people forced to leave their homes and sent to quarantine centres.

And for the almost 25 million people who live here.

The lockdown has seen many residents lose their incomes, struggle to find enough food and cope mentally with prolonged isolation.

Manufacturers including Western car makers Volkswagen and Tesla have been particularly impacted by the restrictions as staff were kept away from factories or had to work in "closed loop" conditions, where they lived at the plants.

The rigidity of the restrictions also caused much frustration in the city.

"Shanghai is such a good place… but with all production, all business paused for two months?" a woman in her 50s from Shanghai told the BBC. "I hope these will all be resumed soon. I want my prosperous Shanghai city back."

That might take longer as the city reopens cautiously.

Speakers were blaring outside an upscale mall, reminding people to wear masks and informing that their temperature would be checked and their health code inspected before they could enter.

Only half the shops would open, the manager told the BBC, since some staff were still in quarantine.

He said he was not too worried about another outbreak.

"We follow [the] government's rules, we do one major cleaning each day," he added. "We do everything we can."