China said it would “unwaveringly” adhere to its zero-COVID policy, dampening the outlook for global markets, which had recently surged on hopes that Beijing would abandon some of its economically damaging virus curbs.
China is the last major economy committed to eradicating outbreaks as they occur, imposing emergency lockdowns, mass testing, and lengthy quarantines despite widespread disruption to businesses and international supply chains.
Stock markets rose partly as a result of unfounded rumours that Beijing was about to make big policy changes or even lay out a roadmap for a full reopening.
However, the National Health Commission (NHC) spokesperson Mi Feng said on Saturday that Beijing would “hold unswervingly to… the overall policy of dynamic zero-COVID,” putting an end to the rumours.
Mi stated at a news conference that “China is still dealing with the combined threat of imported illnesses and the rise of domestic outbreaks.”
The disease control situation is still dire and challenging, he declared. “People and lives must always come first,”
Speculation that China would relax its strict regulations, which include a ten-day quarantine for visitors and a “circuit-breaker” on international passenger flights affected by Covid, led to a rise in Chinese markets on Friday.
The Shanghai and Shenzhen stock exchanges both saw gains of 2.4% and 3.2%, while the Hang Seng Index closed more than 5% higher.
However, a reopening still seems far off, with regions contributing over 10% of China’s total GDP as of Thursday being subject to some kind of increased viral curbs, according to a calculation by Nomura.
Additionally, the Japanese bank stated that it viewed a “extremely modest possibility” of any policy easing “materially terminating (zero-COVID) before March 2023” and that its effects “would likely be very limited.”
