China’s Not-So-Grand Reopening

China’s Not-So-Grand Reopening

about 1 year ago1 min

Mentioned in story

China pledged big plans to wake up its sleepy economy this week, but they’re not exactly going off without a hitch.

What does this mean?

China clung to its zero-Covid stance for the best part of three years, standing by mass testing and country-stalling lockdowns while the rest of the world got back to business. But in a bid to spur on its lethargic economy, the country’s finally relaxing its painstakingly strict rules. So far, not great: experts reckon China’s now grappling with the biggest outbreak the world has ever seen, with a million new infections and 5,000 deaths a day.

China covid cases

Why should I care?

For markets: Christmas miracles.

Those future-fueling plans will be music to investors’ ears, and they might explain why the Hang Seng China Enterprises index – which tracks some of China’s biggest companies – jumped 3% on Thursday. China’s even started playing ball when it comes to its US-listed firms: after a decade-long standoff, US regulators said last week that they’d been allowed to inspect the work of auditors in China for the first time ever. That’s big, and should save around 200 Chinese companies – including goliaths Alibaba and JD.com – from being delisted from US exchanges.

Hang Seng
Source: Google Finance

The bigger picture: Get the jets ready.

China plans to lighten up quarantine restrictions for overseas travelers next month, which should give its deflated tourism industry a short in the arm. And there’s plenty of joy to go around: hordes of would-be travelers have been stuck at home in China, but newfound freedom could get those high-spending holidaymakers hopping around the world again.

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