Xi Pledges ‘No Retreat’ On COVID. Stocks, Yuan Retreat
Chinese shares tumbled Friday, amid ongoing concerns around the economic fallout of Xi Jinping's strict pandemic containment regime, which the Politburo's Standing Committee not only defended, but suggested was beyond reproach.
The Party will "fight against any speech that distorts, questions or rejects our country’s COVID-control policy," the Committee said, according to a statement carried by CCTV. The policy, authorities insisted, is "scientific and effective" and will "stand the test of h
Remarkably, the head of the second largest economy and the most populated country in the world is full of himself. Again Xi confronts reality more with hubris, and less with informed perspective and intelligence. That ironically “marvelous” tautology may live on in the ongoing story of China with the quintessential autocrat in charge.
I’ve got to say, for all of the faults, limitations, and imperfections in how the US has handled the pandemic, we at least have a reasonable understanding that it’s endemic at this point, according to Anthony Fauci. In other words, it exists, and we can’t do anything about it. But it’s also less disabling and it’s not as threatening to the mostly vaccinated populace as it once was.
China is just a couple years behind us. Remember when our fat orange “core” told everyone Covid would be gone by Easter, 2020, and in case of emergency inject bleach and tan your guts? Wake me up when the Chinese start stealing their pigs’ medicine.
Hilarious headline H!
Imagine how many fewer people would have died under a more competent president in the US? Add it to the list of failures for his administration. Speaking of his failures, anyone done any analysis yet on how the easy to win trade war has impacted global inflation?
China’s current Zero-Covid measures cannot eliminate the virus, so they will either be 1) continued indefinitely or 2) substantially changed.
1) amounts to an very large drag on China’s growth, maybe as much as 5 ppt. Given the growth target, Xi will have to push stimulus very hard. The main tools he seems to be willing to use are construction and business lending, maybe tech liberalization too. There are some ways to invest for that scenario.
2) would likely involve some combination of more/better vaccines and therapeutics. I’m unsure how to address that specific part of the scenario, but its probably unnecessary as a retreat from Zero-Covid would likely boost indicies broadly, in China and abroad.
There is also the scenario where Xi chooses 1) but fails to crank the stimulus dials. I guess one’s general inflation plays would help in that case.
Stepping back a bit, there is a very positive thing about the current situation. The markets have rarely been this exciting, interesting, challenging, and even “fun”. Even if one isn’t exactly having “fun” at the moment, gotta appreciate not being bored.
China uses inactive virus to vaccinate instead of mRNA and it is unclear how effective or durable those vaccines are, even while they are the most used Covid vaccines on the planet
This informs the Zero Covid strategy a bit more