The mood was cautious Tuesday as markets cast a wary eye at a familiar set of concerns — and one “new” one, with the scare quotes there to denote that Taliban rule in Afghanistan isn’t actually new.
Jacinda Ardern took New Zealand into a “snap,” three-day lockdown after a single case of community transmission was identified, the first since February. She called Delta “a game-changer,” and said “the best thing we can do… is to go hard.”
Going “hard” means schools and all non-essential businesses were closed. It was the first nationwide lockdown in New Zealand since the onset of the pandemic. The source of concern is a fiftysomething, unvaccinated Auckland man, infectious since last week. He and his (vaccinated) wife made a cameo at a crowded pub over the weekend in Coromandel, apparently.
Ardern pointed to Australia’s outbreak while explaining her decision. “We don’t want that here,” she said. Over half of Australia’s population is under some sort of lockdown. It hasn’t stopped the spread. The kiwi tumbled on Ardern’s announcement (figure below).
The outlook for RBNZ tightening is suddenly cloudy. Markets had expected an imminent rate hike.
Meanwhile, Chinese tech shares were under siege — again. The beleaguered Hang Seng Tech gauge fell a fifth session (figure below) thanks to new draft rules outlining a prohibition on unfair competition. Alibaba plunged another 5%.
It was just insult to injury. Or maybe insult to injuries, plural. The new rules are all at once vague and specific, a defining feature of Party decrees. “The draft covers protections for intellectual property and brand reputation as well as a ban against using algorithms or fake reviews to promote goods and services,” Bloomberg wrote, summarizing.
Exclusivity arrangements are explicitly banned, but in addition, companies can’t leverage their own technical expertise to hinder competitors. As the same linked Bloomberg piece noted, rules which make it illegal for big-tech to render rival platforms’ services incompatible with theirs “could force giants like Tencent and Alibaba to dismantle their walled-off ecosystems.”
Later, the State Council released a separate set of new rules designed to guard “key network facilities and information systems in energy, traffic, finance and defense.” Those restrictions are effective as of September 1. Enforcement will be carried out via “security checks” on the purchase of network products and services should any such deals be deemed injurious to national security. China pointed to its cybersecurity laws.
As if all of that weren’t enough, a source said the Party managed to appoint a director to ByteDance’s board earlier this year, when the company sold a small stake to a trio of investors, one of which is controlled by China’s internet regulator.
Mainland investors sold Hong Kong shares for a fourth session Tuesday. “Investors are thinking ‘sell it first’,” one analyst told Bloomberg, describing the mood among traders, as Xi releases one decree after another after another after another.
Coming quickly back to the pandemic, those suggesting America’s new COVID wave wouldn’t be as deadly as previous waves have been proven wrong — at least in some hotspot states. Florida is averaging more than 200 COVID-related deaths per day in hospitals, data from the Department of Health and Human Services showed. Similarly, Arkansas, Louisiana and Missouri are all witnessing a surge in fatalities among patients.
In Japan, Tokyo found another 4,377 cases in the latest update. That brought the seven-day average to 4,527 (there’s more on Tokyo here).
Finally, the Taliban said it “doesn’t want women to be victims” this time around. In fact, the group’s cultural commission said Tuesday that women “should be in the government structure according to Shariah law.”
As the AP dryly noted, “that would be a marked departure from the last time the Taliban were in power, when women were largely confined to their homes.”
Xi is now leading Europe and the US in trying to control internet monopolies and data privacy. It seems like Europe was the first of the three to worry about these things. There’s lots of talk and jockeying amongst politicians in the US with few results so far. Xi seems to be all over it at the moment which implies he believes it’s a key component of building China’s global strength (or dominance). Maybe he sees all things internet as the newest frontier (and most important) on which to plant the Chinese flag.