GOING IT ALONE
While much of the world has been opening up, China has vowed to stick to its zero-tolerance approach to COVID-19 with lockdowns and mass testing imposed when even a single case is found, and has shown little sign of laying groundwork to begin easing the policy.
On Tuesday, an unverified note circulating on social media that China was planning a reopening from strict curbs in March triggered a sharp surge in beaten down stocks in Hong Kong and mainland China.
China’s foreign ministry said it was unaware of the situation.
“I truly don’t know anything about this,” spokesman Zhao Lijian said in response to questions at a regular briefing.
Gavekal Dragonomics analyst Ernan Cui wrote in a Tuesday note that China faces the most serious challenge to its containment policy in months, after more than 80 per cent of major cities reported cases last month.
She said the risk of lockdowns like the one that crippled Shanghai earlier this year is at its highest since May.
“With no clear end in sight to the country’s strict containment policy, tighter lockdowns and more supply-side disruptions appear inevitable in the months ahead,” she wrote.
Brokerage Nomura estimated there were lockdowns and restrictions in 28 cities last week, affecting almost 208 million people, or 8.5 per cent of China’s GDP.
“COVID-zero changes the calculus of doing business within China,” said Michael Hart, president of the Beijing-based American Chamber of Commerce in China.
“Interruption from COVID-zero does appear to be the number one concern for our members, and number two is probably the slowing economy, mostly caused by interruption from COVID-zero.”