COVID in China this week: Optimists buy shares, pessimists buy lockdown supplies

Politics & Current Affairs

One day it's fine and next it's not. Will Chinaโ€™s COVID paranoia stay or will it go?

A COVID test administrator in Hohhot, Inner Mongolia, China, on November 18, 2022. Photo by CFOTO/Sipa USA via Reuters.

โ€œHong Kong and mainland Chinese shares have bottomed out with Chinaโ€™s economy approaching a turning point,โ€ said Hรณng Hร o ๆดช็, the market analyst whose October 31 tweet about Beijing ending COVID-zero reopening in March 2023 helped juice a stock rally over the past three weeks. Meanwhile, Bloomberg says that a โ€œbullish consensus for Chinese shares is emerging on Wall Street, with newfound optimism aroundโ€ COVID-zero policy changes.

Indeed the government last week appeared to ease some virus-control restrictions for the tourism and entertainment industries:

  • According to several directives issued by the Ministry of Culture and Tourism last Friday, capacity limits should be completely removed for large-scale entertainment venues such as theaters and for events such as concerts and music festivals in areas without COVID-19 outbreaks.
  • In addition, the authorities ordered local administrators to โ€œminimize the impact of COVID-19โ€ on the tourism industry while protecting peopleโ€™s safety and health.

But not everyone is convinced that things will get better: Small business owners in China are pessimistic about their fourth-quarter performance because of โ€œsluggish demand and uncertainties around COVID-19 policies,โ€ according to a survey by Peking University and Alibabaโ€™s fintech affiliate Ant Group cited by Caixin. Foreign companies in China are nervous, too, as is JD.com, Alibabaโ€™s major ecommerce competitor.

And COVID cases are spiking: Today Chinaโ€™s National Health Commission reported that two octogenarians died yesterday in Beijing from COVID, following the death of an 87-year-old man in the city on Saturday.

  • China also reported around 26,000 locally transmitted new daily cases in Beijing for Sunday, as cases in other major cities also surge.