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The economic and social reactions to the reopening of borders in China

The economic and social reactions to the reopening of borders in China

A few hours after China's announcement that it wanted to abolish the quarantine for travelers arriving from abroad, the country's main travel agencies have recorded a surge in traffic but although Beijing continues to downplay the data on infections and deaths from Covid the numbers of the largest Chinese funeral home tell another story…

Although it is assumed that in the first 20 days of December at least 248 million people in China, or almost 20% of the entire population, have contracted the virus, Beijing has announced that from January 8 it will abolish the quarantine for travelers arriving from 'abroad.

Meanwhile, the first doses of Pfizer/BioNTech's anti-Covid vaccine sent from Berlin and intended for Germans residing in China landed in the country last week.

FREE ALL?

China, after easing its zero Covid strategy by halting mass testing, case tracking and counting, and changing the definition of death from Covid, is also preparing to lift the quarantine for those arriving from the abroad. Indeed, incoming travelers will only need to show a negative test carried out in the 48 hours prior to arrival. For the moment, the novelty will affect people who wish to travel to China for work and study reasons, as well as for visits and family reunifications, while it is not yet clear whether it will also concern tourist visas.

Closed borders were the last major restriction. Since March 2020, anyone landing in China has been required to undergo mandatory quarantine at a state facility , for up to three weeks. It was recently reduced to five days.

But Beijing's priorities have clearly changed. From thinking of defeating Covid even at the cost of sacrificing the economy, imposing lockdowns and isolating workers even if they have only come into contact with a positive, to believing that it is not sustainable to continue like this by eliminating almost all the restrictions.

THE ECONOMIC REACTION

Following Beijing's announcement, "the share prices of Shanghai and Shenzhen rose, respectively, by 0.88% and 0.74%", writes Milano Finanza today, where we also read that Gabriel Debach, market analyst at eToro stated: "Chinese stock markets, in the face of substantial decisive political changes and supported by their central bank, can continue to toast".

Debach, continues MF , also recalled "that the People's Bank of China (PBoC) on December 27 injected new liquidity into the banking system for an amount of about 206 billion yuan, figures that follow last week's figures of 704 billion yuan (the largest weekly injection since the end of October).”

THE SOCIAL REACTION

The country's leading online travel agencies, the BBC said, saw traffic surge within hours of the announcement. According to Reuters , data from travel platform Ctrip showed that searches for popular cross-border destinations had increased 10-fold within half an hour of the news, and platform Qunar said it had seen a 7-fold increase in flight searches within 15 minutes. international.

However, an immediate surge in international travel is not expected because, as the news agency explains, the government, which has discouraged international travel since 2020 due to the dangers of Covid, also said in its announcement on the reopening of borders that outbound travel would be restored "in an orderly manner", without providing further details.

EVEN THE NEW STRATEGY IS ALREADY FAILING

Another issue that continues to remain very unclear concerns the real human cost of this change of strategy.Indeed, the true number of daily cases and deaths currently remains unknown because officials have stopped publishing data related to Covid.

Reuters , based on Airfinity health data, estimated that more than one million infections and 5,000 deaths per day are recorded in China and according to Bloomberg , in the first 20 days of December at least 248 million people would have contracted the virus, almost 20% of the entire population.

THE NUMBERS OF FUNERAL HOMES

The Stock Exchange is also questioning the truth of Beijing, where only about 4,000 new infections a day and few deaths are officially recorded.

In fact, on CNBC we read that the shares of China's largest funeral home, listed in Hong Kong, have risen "to the highest level in more than a year".

As of Friday's close, shares of Fu Shou Yuan International Group hit HK$7.04, a record high for 2022, “up about 80% in two months following the abrupt halt of most of the anti-Covid restrictions and the increase in the number of cases".

Now the group's shares, which in November were down nearly 40% in 2022, are on course to gain 15% year over year.


This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/sanita/le-reazioni-economiche-e-sociali-alla-riapertura-delle-frontiere-in-cina/ on Tue, 27 Dec 2022 14:12:18 +0000.