The last week of the year starts with green numbers in Stock Exchanges. Both European and US markets post gains after the Christmas holidays. Special, Ibex is up 0.40%, which puts it back to 8,300 points.. Eurostoxx 50 rose 0.47%, CAC 40 0.79% and Milan 0.35%. Most Asian markets also held the session after the loosening of China’s zero covid policy. The Shanghai Index rose almost 1%, while the China A50 gained 1.22%. The Nikkei closed with a slight gain of 0.16%. Authorities announced this Monday that they will withdraw the quarantine requirement at country entrances, which has been in effect since March 2020, on January 8. In addition, the National Health Commission announced that covid will no longer be a category A disease. The maximum level of danger at which drastic measures are required. It will now be considered category B, where looser infection control is expected. Strict policy against the epidemic has been putting pressure on the Chinese economy since the beginning of 2020, fueling the public’s great discontent against President Xi Jinping, which became visible in the strong protests last month.
Restrictions on international air traffic in China will also be lifted, which for two years has been limited to less than 5% of what it was before the pandemic. Chinese traveled to travel destinations this Tuesday after borders reopened despite a surge in infections in the healthcare system.. The change in health policy caused the virus to spread throughout the country in a largely uncontrolled manner. But official statistics show that only one person died from covid in the seven days before Monday, casting doubt on the reliability of the data made public by the Chinese government.
Doctors say hospitals are filled with five or six times more patients than usual. Most of them are old, according to the Reuters agency. Some public health experts estimate that the opening could cause a million deaths. But officials are determined to end the zero covid strategy.
And the Chinese want to make up for lost time. Data from travel platform Ctrip showed that searches for popular cross-border destinations increased tenfold in the half hour following the news. According to Ctrip, the most searched were Macau, Hong Kong, Japan, Thailand and South Korea. Data from another platform, Qunar, showed international flight searches had increased sevenfold in the 15 minutes following the news, with Thailand, Japan and South Korea at the top of the list.
According to estimates by the Thai Chamber of Commerce, Thailand expects about five million Chinese tourists to visit the country in 2023. “A positive impact on all sectors of the Thai economy”, hit hard by the pandemic. In 2019, Chinese accounted for almost one-third of the nearly 40 million international tourists who visited Thailand all year before covid-19, while they were responsible for about 20% of the spending left by travelers during the same period, according to the EFE agency.
The B side of this travel spree is shown by the healthcare industry. Doctors point to overwork and report rising demand for funeral home services. Retired doctors were also used to supplement the staff.
growth prospect
The ban on the Covid-zero policy heralds a strong recovery in the world’s largest economy by the end of next year, after the effects of the country’s strong wave of infections this week have worn off. Many stores and establishments in Shanghai and Beijing had to close as many of their employees were infected with covid.
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“The biggest concern is the temporary disruption of the supply chain due to losses of Chinese workers due to the wave of infections,” JP Morgan analysts said in a report. Economic data released this Tuesday showed industry profits fell 3.6% in the first eleven months of the year.. This is 0.6% more than in the January-October period due to the strong restrictions imposed in regions with a large number of factories.
Experts call for measures at the beginning of 2023, despite the lifting of restrictions. “Covid continues to spread across the country and this will disrupt the normal rhythm of work. The loss of productivity is significant and inflationary pressures may be strong in the coming months due to the sudden increase in demand.“Supply will surpass the recovery,” Dan Wang, chief economist at Hang Seng Bank China, told Reuters.