On Monday, Chinese travel stocks sank on worries that a rise in coronavirus cases has led to an increase in lockdowns. To respond to outbreaks with rigorous limitations, the nation has developed a strict “zero Covid” policy. Anhui Province is the most recent area to experience a new round of lockdowns, and China’s National Health Commission recorded hundreds of new instances of Covid-19 over the weekend. To stop the coronavirus from spreading, a strict “zero Covid” policy was implemented, starting in late March, in Shanghai and other areas.
China’s economy slowed down as a result of the limitations, which also made supply chains chaotic and increased global inflationary pressures. They severely damaged the nation’s important domestic and international tourism industry. The second-largest economy in the world currently seems to be experiencing a Covid-19 rebound, even though these policies were just unravelled at the beginning of June. Compared to a few dozen in late June, the number of daily locally transmitted diseases in mainland China climbed over the weekend to over 300. Although small by global measures, local authorities have nonetheless shut down certain enterprises and imprisoned more than a million people.
The sector was on the shakier ground on Monday, generally decreasing in comparison to a 0.5 percent raise for the Shanghai Composite Index. Chinese travel stocks rose last week as the authorities sought to relax quarantine and testing requirements, but the industry was on shakier ground on Monday.
China Eastern Airlines (600115. China) just eked out a gain of less than 1% while Air China (ticker: 601111. China) plummeted by 3% in Shanghai trading. Guangzhou Baiyun International Airport (600004. China) and Huatian Hotel Group (000428. China) both had declines of less than 5% and 1%, respectively.
As part of its “dynamic COVID zero” plan, China still demands that local governments identify and treat new infections as quickly as possible, while it has cautioned against needlessly enforcing stringent restrictions as it works to recover the economy.
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