International investors and businesses are breathing a sigh of relief following China’s relieving its COVID policies sooner than expected.
Key Details
- China will be scrapping its strict COVID travel requirements and pulling back from its Zero-COVID Policy as of January 8, 2023, the government announced Monday.
- China is simultaneously facing increasing COVID-19 numbers and a struggling economy, causing political unrest. Case numbers began rising in early November and peaked on December 2 with 62,439 new cases.
- The decision was welcomed by foreign companies, which have felt the sting of the country’s lockdowns, travel restrictions, and crackdowns.
- Japan, India, and other neighboring countries are tightening their visiting restrictions for travelers returning from China to stem further COVID outbreaks.
Why it’s Important
A number of factors have made Chinese markets non-desirable for Western capital. Ending its quarantine opens up new business opportunities for a country that had otherwise spent the past year alienating foreign markets after previously worrying western buyers when COVID caused supply chain issues of vital medical supplies.
“The ruling Communist Party’s abrupt decision to lift some of the world’s strictest anti-virus controls comes as it tries reverse an economic downturn. It has ended curbs that confined millions of people to their homes and sparked protests, but hospitals have been flooded with feverish, wheezing patients as the virus spreads,” says AP.
COVID restrictions have contributed to China’s shrinking GDP and also angered the population, resulting in violent protests.
Investors and manufacturers have slowly begun to divest of mainland China due to its military aggression and hostile business climate. Major companies like Apple have already made efforts to shift the production of iPhones to India and Vietnam. Taiwanese investors are also making inroads in drawing further investment from the U.S.
China’s tightening of its markets has already scared investors from its stock exchanges in Hong Kong, Shenzhen, and Shanghai.
Notable Quote
“It finally feels like China has turned the corner. [Ending the quarantine] clears the way for the resumption of normal business travel,” says Chamber of Commerce chairman Colm Rafferty.