China has blocked a key transport hub in the south as the country grapples with its biggest nationwide Covid outbreak since April.
The lockdown also follows the rise in cases in Beijing, which has reported the country’s first Covid deaths in nearly six months.
In recent days, China has begun to ease its tough restrictions on the disease, which have paralyzed local and international businesses for months. But experts are concerned that Beijing’s resolve to reopen the country could weaken now as cases rise again.
Asian markets and oil prices fell on Monday (21), with investors worried about the prospect of China tightening Covid rules again.
The Hang Seng Index (HSI) fell as much as 3.4% in the morning. It ended down 1.9%. Mainland China’s Shanghai Composite Index lost 0.4%.
Crude oil prices also fell, with US crude futures down 0.4% in Asian trading hours on Monday. Brent crude, the global oil benchmark, fell 0.6%.
Guangzhou, one of China’s biggest cities with nearly 19 million people, has imposed a five-day lockdown on the Baiyun district, home to one of the country’s busiest airports. Baiyun is also Guangzhou’s most populous district, home to 3.7 million people.
Schools will be closed, public transport services will be suspended and residents are advised to stay at home, according to a statement posted by the Baiyun District government on WeChat on Monday.
The lockdown comes as Guangzhou struggles to contain its worst Covid outbreak in three years. Guangzhou reported 8,181 cases on Sunday, bringing the total number of infections to more than 80,000 since Oct.
There are growing fears that cities are once again paralyzed in this world’s second-largest economy.
From Guangzhou in the south to Zhengzhou in the central region, rising cases have forced local governments to tighten lockdowns in recent days. China on Sunday reported 26,824 new cases across the country.
Beijing, the country’s capital, recorded three deaths from Covid over the weekend. The city’s Haidian district has canceled in-person classes, according to a district government statement on Sunday.
Shijiazhuang, the largest city in the northern province of Hebei, also reimposed a five-day lockdown from Monday, just days after significantly easing Covid rules.
The latest outbreaks could make it harder for China to relax from its nearly three-year-old “covid zero” policy.
Markets are worried
On 11 November, the central government eased some of its strict Covid restrictions.
The move stoked hopes that China was moving away from its draconian zero-tolerance approach that has crippled its economy and largely isolated the country from the rest of the world in recent years.
Markets rallied after the move, with Hong Kong’s Hang Seng Index rising 14% in three sessions and entering a technical bull market last Tuesday.
But the new lockdowns hit market sentiment on Monday.
“The big driver of the immediate downturn is growing unease that China will not loosen Covid lockdown policies because infections are rising again,” said Stephen Innes, managing partner at SPI Asset Management.
Goldman Sachs analysts said the latest news about China’s Covid management has been “confusing” for investors.
“Our main message is that the first stage of reopening can be messy and bumpy, while the recovery after the initial hurdle can be very steep,” they added, expecting China’s GDP growth to accelerate from 3% in 2022 to 4.5%. % in 2023.
Source: CNN Brasil
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