“There will be small tweaks, as there have been over the last few months,” Loeb says, “but there thus far is simply no indication of significant policy easing anytime soon.” It appears that China’s strict virus countermeasures will stay in place for the foreseeable future. It claimed, according to Bloomberg News, that China’s fourth-highest ranking official Wang Huning held a meeting with COVID-19 experts and that they discussed “speeding up a conditional opening plan, with the goal of substantially opening by March next year.” The social media post in early November that caused a market rally worth hundreds of millions of dollars stemmed from an unverified post on WeChat. “The desire for a positive catalyst mixed with a shaky information ecosystem creates the perfect environment for rumors to spread,” he says. It has become increasingly difficult for many western media outlets to report from the mainland, and many foreign journalists have left the country. He adds that an information vacuum isn’t helping the problem. The market is looking for anything positive out of China,” he says. COVID policy, on the other hand, will change course someday. “The likelihood of any of those trends reversing is slim to none. Loeb says reopening rumors may be gaining traction because there have been so many negative catalysts for markets in recent years- tech and private education crackdowns, deteriorating relations with the West, an increased consolidation of power around Xi. “The reliance on the same playbook in responding to the outbreak,” says Huang, “suggests that Beijing has no plans to give up the zero-COVID mentality anytime soon.” Why do some people believe zero-Covid is going away? Public transportation and schools were suspended across the city, and thousands of flights were canceled. Last week, local authorities ordered residents of districts with a population of almost 5 million people to stay home at least through Sunday, according to the Associated Press. Asked at a press conference earlier this month if there would be a change of policy in the near term, disease control official Hu Xiang said China’s measures are “completely correct, as well as the most economical and effective.” She said that China “should adhere to the principle of putting people and lives first, and the broader strategy of preventing imports from outside and internal rebounds.”Įvidence that zero-COVID isn’t going away anytime soon is currently on display in Guangzhou, a manufacturing hub of 13 million people in southern China. That’s despite Chinese officials shooting down such rumors. The rally was buoyed further when Reuters reported that a former Chinese disease control official told a banking conference that China would make “major changes” to its COVID policies in the next few months. In early November, Hong Kong stocks surged after rumblings on social media, based on an unauthenticated post, that Chinese officials were discussing rolling back some of the country’s draconian zero-COVID policies (many of the stocks listed in Hong Kong are those of mainland companies). Some observers speculated that the Chinese President might begin loosening COVID-19 countermeasures after he secured a precedent shattering third term in October, hopes shared by at least some Chinese residents. Relaxation rumors dashed by reality on the ground As of late October, 28 Chinese cities were implementing some form of lockdown measures, impacting more than 200 million people, analysts from the financial services firm Nomura told Reuters. When Wuhan reported around 20 new infections a few weeks ago, authorities ordered more than 800,000 people in one district to stay at home. Early last month, residents of far-western Xinjiang were banned from leaving after a virus outbreak there, and nearly all flights in and out of the region were canceled. In August, tens of thousands of Chinese tourists were stranded on the resort island of Sanya after a lockdown was imposed. Many western countries have decided to live with the virus, and the stay-at-home measures that were in place early in the pandemic are long gone, as are most masking and quarantine requirements.īut China has continued to use lockdowns to try to stamp out virus cases. Over the last year, other countries have moved to lift their policies on COVID-19.
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