Swelling protests against China’s virus-induced curbs may end up supporting asset prices by encouraging President Xi Jinping to accelerate the nation’s exit from Covid Zero, according to some market watchers.
“I don’t expect Xi to publicly admit error or show weakness, but this wave of protests could cause the leadership to decide privately that the exit needs to proceed more quickly than previously planned,” said Gabriel Wildau, managing director at advisory firm Teneo Holdings LLC in New York.
Most risk assets slid in early Asian trade Monday on concern the unrest in China, coupled with surging daily infections, may convince the authorities to introduce further Covid restrictions. At the same time, the country’s focus after last month’s Communist Party congress has been on supporting the economy on a wide array of issues from reopening and the property crisis to relations with the US.
There are two big questions at the heart of the Chinese protests against COVID-zero. The first is how long they will be tolerated for before remedial action is taken. The second is how swiftly the COVID-zero mechanism will be dismantled.Click HERE to subscribe to Fuller Treacy Money Back to top