Rumors or the truth about the lifting of quarantine in China?
2022.12.05 01:53
Rumors or the truth about the lifting of quarantine in China?
Budrigannews.com – At the beginning of the week, markets are optimistic on the hope that China’s anti-COVID policy will soon end, allowing the world’s second-largest economy to fully reopen.
Oil benefited from hopes of a Chinese reopening, reaching $81.41 at the time of writing, an increase of 1.8%, as markets reopened.
The stock market index in Hong Kong is up 3.4%, while the stock market index in China is up 1.4%.
COVID restrictions are lifted in China
The fact that some COVID-19 restrictions have been relaxed in the cities of Shanghai and Hangzhou is one of the most significant indicators of China’s growing reopening movement.
Beginning on Monday, Shanghai’s financial district will no longer require PCR testing to enter outdoor public areas or take public transportation, according to a statement released by city officials on Sunday. The measures “will continue to be optimized and adjusted” as the situation progresses, according to the statement.
On Sunday, the city of Zhengzhou, home to Apple Inc.’s (NASDAQ:) headquarters, as well as the city of Hangzhou also made announcements of measures that were similar.largest China manufacturing facility.
To put it another way, despite the fact that no decisions have been made at the national level (with the exception of a change to the elderly vaccination program last week), recent announcements made by local governments, which presumably do not go against the Party’s will, indicate that China is getting ready to reopen.
Hu Xijin, a commentator for China’s state-linked Global Times newspaper who is reputed to be well-informed about the intentions of the government, provided some clues in a tweet on Sunday afternoon regarding the timing of a wider economic reopening.
He estimated that “such transition will not be long” and that “by the Chinese New Year, new adaptability will emerge among people, confidence will be on a new foundation, and Chinese economy will usher in a relatively strong rebound” despite warning that China’s easing of anti-COVID measures “will increase chaos in a short time.”
Keep in mind that the date of the Chinese New Year will be January 22, 2023.
It is also interesting to note that Goldman Sachs issued a note last weekend, which was quoted in the Wall Street Journal on Sunday, urging caution regarding the reopening of the Chinese economy despite these clearly positive signs.
The bank wrote, “The easing measures don’t yet amount to an abandonment of the zero-COVID policy,” adding:
“Rather, we view them as clear evidence of the Chinese government trying to minimize the economic and social cost of COVID control in the interim”
However, Goldman Sachs stated that “preparations may last a few months and there are likely to be challenges along the way,” clearly implying that recent positive signals should not be met with complacency. On the other hand,
The effectiveness of Chinese vaccines may be one of the difficulties Goldman Sachs mentioned.Indeed, Taiwanese media reports that director of U.S. national intelligence Avril Haines stated on Saturday that “Chinese President Xi Jinping is unwilling to accept Western vaccines.”
Haines stated at the annual Reagan National Defense Forum in California that Xi “is unwilling to take a better vaccine from the West, and is instead relying on a vaccine in China that’s just not nearly as effective against Omicron.”
Using only its own domestic vaccines, China has not approved any foreign COVID-19 vaccines.However, a number of studies have demonstrated that they are not as effective as some vaccines from abroad.
According to experts, this indicates that reducing virus prevention measures may carry significant risks. This doesn’t rule out the possibility that China might be forced to backtrack on the reopening process if it goes too quickly or poorly, which could have a big impact on markets.
