Rumors drive stock prices: is China planning the end of the zero-Covid policy?

In China, speculation is mounting about a gradual exit from the zero-Covid policy. Even rumors about the preparations for the change of course caused shares in Chinese companies to rise worldwide.

There is speculation on the Internet that the Chinese state and party leadership has commissioned a committee to prepare an exit from the zero-Covid policy. According to the rumours, the committee headed by high-ranking politician Wang Huning is to work out how the strict measures can be relaxed by March and how the borders of the People’s Republic, which have been largely closed for two and a half years, can be reopened.

The spokesman for the Chinese state and party leadership, Zhao Lijian, said when asked by a reporter that he knew nothing about it. However, the rumors have caused share prices of Chinese companies to rise worldwide. The Hang Seng Index in Hong Kong closed up 5 percent yesterday after rising 7 percent.

People increasingly annoyed by the measures

Since spring 2020, China has been taking action against the smallest outbreaks with tough lockdowns, mass tests, contact tracing using mobile phone data, forced quarantine and travel bans and is trying to eradicate the virus.

People are increasingly annoyed by the measures. The strict zero-Covid policy in mainland China is also causing great economic damage in the world’s second largest economy. The corona numbers in China are currently almost 3,000 new infections a day, higher than they have been for months.

Covid outbreak in factory: workers probably partly locked up

Recently, an outbreak in the world’s largest iPhone factory in the city of Zhengzhou caused a stir. According to reports, workers at the factory of Apple contractor Foxconn were sometimes locked in their dormitories. Videos and images circulating online show hundreds of people attempting to flee.

Authorities have now cordoned off the area around the factory. People are “not allowed to leave their homes – except to take corona tests and receive emergency medical treatment,” said representatives of the industrial area. The area will be “statically managed” for seven days, it said. The more than 600,000 residents of the industrial area have to be tested for the corona virus every day, the local government said.

Xi recently defended the zero-Covid strategy

At the Communist Party Congress that just ended, General Secretary Xi Jinping once again defended the strict zero-Covid strategy. Part of the difficulty in phasing out is that millions of older people are still not fully vaccinated.