China coronavirus situation has been brushed aside

The China coronavirus situation has been brushed aside this week despite the fresh tightening. After the 20th National Congress of the Chinese Communist Party last month, investors were backing the enthusiasm surrounding the prospects that Beijing would adjust its zero-COVID policy.

There had been announcements of the strategy mentioned back in November of a strategy to loosen restrictions that bolstered markets. However, new outbreaks temporarily shook markets up, starting with a warning from doctors to the government that the nation is not to relax lockdown measures, in an article by the Financial Times: China’s doctors warn ‘we’re not ready’ as threat of covid ‘exit wave’ stymies reopening ambitions.

The article started as follows:

China’s doctors have a blunt message for Xi Jinping: the country’s healthcare system is not prepared to deal with a huge nationwide coronavirus outbreak that will inevitably follow any easing of strict measures to contain Covid-19. The warning for China’s leader was delivered by a dozen health professionals — including frontline doctors and nurses and local government health officials — interviewed by the Financial Times this month, and echoed by international experts. “The medical system will probably be paralysed when faced with mass cases,” said one doctor in a public hospital in Wuhan, central China, where the pandemic started nearly three years ago.

Meanwhile, at the start of this week, it was seen that China had recorded more than 28,000 new cases a day, nearly passing the country’s record. subsequently, authorities have since closed public spaces again—especially in Beijing, Shanghai, and other mega-cities.

In a recent analysis, Nomura reported that the COVID-19 restrictions have affected 20 per cent of China’s GDP. People’s Daily put out an article on Thursday that states that China must be quick in curbing covid spread. Today, it is reported that China's daily COVID cases rose to 29,754, the highest of the pandemic, so far.

Nevertheless, global shares edged higher this week recovering some of the previous losses made at the start of the week. Improved investor risk appetite drove flows into equities.  Wall Street's major indexes closed higher on Wednesday, for instance, after investors cheered the Fed's meeting minutes.

The minutes showed that a "substantial majority" of policymakers at the Federal Reserve's meeting early this month agreed it would "likely soon be appropriate" to slow the pace of interest rate hikes. Consequently, the Dow recorded its highest closing level since April 2021.