“We saw stock markets already crash last month after the party congress,” Poldermans says. “When it became known that the corona policy would be relaxed, the stock markets rebounded. But there’s not much left of that awakening.”
According to Poldermans, China is still very focused on coronavirus policy. “Right now, for example, only 57 percent of the population has had a booster vaccine.” According to the sinologist, this leads to a lot of unrest. ‘The populace is angry and the corporate culture is also turned upside down. Traveling domestically is a risk, you don’t know when get stuck.’
Economic growth
Economic growth forecast for China this year was 5.5%. According to Poldermans, very little remains. However, this is not only due to the covid policy. ‘Productivity in China is four times lower than that of the United States, have a lot to do with aging and declining population. Weather conditions such as floods and extreme drought also took their toll,’ he says.
This has direct repercussions on the global economy. But despite all the circumstances, trade from China has increased, according to the sinologist. “Imports from China increased by more than 20% last year, and it seems that this year will be the same again, which is surprising.”
Hang Seng
Meanwhile, Hong Kong’s Hang Seng Index fell 1.3%, the fifth consecutive loss. Casino companies with operations in the Asian gambling haven of Macau have suffered from fears of stricter lockdowns in China. Wynn Macau, for example, lost more than 3%. Chinese search engine Baidu fell 1.5% on the internet company’s results.
Shanghai
The Shanghai stock market erased an earlier price loss and showed some recovery on speculation about further government support measures for the economy, which has been badly hit by the severe coronavirus measures this year. For example, Chinese banks would be encouraged to lend more to businesses. The index rose 0.3%.
Nikkei
Tokyo’s Nikkei finished up 0.6%. Automaker Toyota and steelmaker Nippon Steel were among the strongest bulls with gains of 2.5% and 1.9%. Shionogi received 3 percent, after reporting that the drug company’s corona pill could be approved. Investors took it easy ahead of a national holiday in Japan on Wednesday. Seoul’s Kospi fell 0.5% and Sydney’s All Ordinaries gained 0.6%.