Breathe a sigh of relief for the market: China eases covid restrictions
📍 Over the last week, Xi Jinping’s government has decided to ease the restrictions that have been in place since the beginning of Covid. This is due to market pressures and, above all, to the violent riots carried out by Chinese citizens, who were unhappy with the measures taken by the Chinese authorities.
📍 Although it is still too early to predict a complete reopening of the Asian country, investors have reacted positively with rises in the stock market, as they expect the reopening of China to be sooner than expected.
📍This is good news for both the Chinese economy and the world economy, as several companies were having supply problems due to the closure of several factories in the Asian country. In addition, in the last week, the Chinese yuan has had a strong appreciation against the dollar (however, it is still one of the worst years for the yuan).
📍Although the market has reacted positively, there is still a long way to go for a full opening, as, even if China is the largest oil importing country, at the beginning of the week the price of oil has plummeted due to investors’ belief that demand remains weak
Source: Financial Times