Image: International Exodus
China looks increasingly left to its own devices in a bid to rescue its economy and markets from the Covid crisis as the rest of the world withdraws stimulus to battle surging inflation. Unlike in 2020, when Beijing was able to limit disruptions to its manufacturing hubs and rely on unprecedented global liquidity to shore up investor confidence, this time it has to go it alone.
A strict Covid Zero policy has left it stuck in a repeat of lockdowns while other countries have turned to reopening their economies. International funds are selling out of Chinese assets, while efforts to encourage domestic money into capital markets aren’t working as protracted restrictions and a slowing property market erode wealth.
Chinese cities lose their international luster
Cities like Hong Kong and Shanghai are losing their international luster as Covid restrictions bite. Extreme Covid measures have heavily restricted the lives of residents in both cities, with Shanghai now entering the fourth week of government-mandated home lockdown, and Hong Kong chafing under a third year of quarantine and travel curbs. Once China's gateways to the West, heavy-handed border closures and suspended air routes have closed the two cities off to much of the world, even as other hubs open up.
On Tuesday, just a single flight arrived in Hong Kong from outside Asia Pacific -- a stark contrast to the pre-pandemic era when the city's airport was one of the world's busiest, regularly hosting 1,100 passenger and cargo flights daily to and from 200 international destinations Now most of the traffic is outbound, carrying residents fleeing Hong Kong for greener pastures with fewer restrictions. In February and March, more than 180,000 people left the city while only about 39,000 entered, according to immigration data.
Shanghai, like Hong Kong, is home to large numbers of foreign residents -- but fears are growing that too could soon change. Jörg Wuttke, president of the European Union Chamber of Commerce in China, estimates China has lost about 50% of all European expatriates since the pandemic started -- and he warns there could be another exodus of families this summer when the school year ends. "I wouldn't be surprised if another half of (those remaining) leave,"
Source: CNN
https://www.cnn.com/2022/04/22/china/china-hubs-shanghai-hong-kong-covid-intl-hnk-mic/index.html
Fears of lockdown grows,
many questions remain for the foreign business community
Foreign businesses in Chinese capital keep wary eye on Covid cases as fears of lockdown grow. Mass testing under way across most of Beijing and people told to stay at home. The municipal government announced on Monday that 11 of the city’s 16 districts would undergo three rounds of nucleic acid testing from Tuesday and residents should limit their movements and avoid social contact until the results were in. Since Friday, Beijing has recorded 92 community cases. Many of the early cases were found in Chaoyang district, part of which has been sealed off as a “temporary control area”.
Joerg Wuttke, president of European Union Chamber of Commerce in China, said he expected the impact of controls in Beijing to be less severe than those in Shanghai because the capital had fewer factories, requiring fewer people on site to keep machines running. But the business community had seen the disruptions to business and life in Shanghai. “The emotional effect is fear. Lockdown in Shanghai has sent shock waves through the communities in Beijing. People can’t help asking what would be next,” Wuttke said. “We hope Beijing will be able to handle the pandemic much better". Wuttke said that rather than draconian testing, the authorities should focus on mass vaccination, especially of the elderly, a point the chamber underlined in a letter to Vice-Premier Hu Chunhua early this month, urging China to dispense with its old toolbox of mass testing and isolation.
Colm Rafferty, chairman of the American Chamber of Commerce in China, said the situation in Beijing appeared to be stable for now, with smooth mass testing and no food shortages. But the business community remained concerned about the possibility of a citywide lockdown. “Many questions remain for the foreign business community, such as: ‘What is the government’s strategy and timeline for opening back up? How will my business be further impacted? What factors determine a stay in central quarantine for me and my family? Is there a possibility that I will be separated from my young children? If I’m put into an extended lockdown, can I leave the country?’” Rafferty said. The chamber said China had kept Covid-19 largely at bay in the last two years but conditions now were very different and case surges, lockdowns and greater uncertainty had made doing business “very challenging”.
Overseas investment
Overseas investors offloaded 45 billion yuan ($7 billion) of stocks in March, the largest outflow in nearly two years, while global funds slashed their holdings of Chinese bonds by the most on record that month.
Bankers looking to leave Shanghai
Finance sector professionals in Shanghai are preparing to move back to Hong Kong and other offshore centres after spending only a few years in the Chinese city as a harsh Covid-19 lockdown has hurt their business prospects and upended daily lives. Thousands of bankers, traders and investors in the financial hub of the world's second-largest economy have found themselves confined to their homes, with some even struggling to secure food and other essentials for their families.
The four-week-long lockdown, which has forced most of the city's 26 million people indoors, has started to weigh on prospective financial deals with some transactions being put on hold due to logistical challenges, industry executives said.
An exodus will hurt Shanghai's ambition to be a regional financial centre and bring bad news for foreign investment banks, insurers and asset and wealth managers who have been expanding their footprints in the city over the past few years as China opened up its financial sector. "Once this lockdown is over, expats across all industries will negotiate a new career outside of China," said Jason Tan, Shanghai-based director specialising in wealth, buyside and fintech at headhunter REForce group.
POLL: Are You Staying in China?
Lots of us are now entering our third year, that we haven't seen family or friends - so many people this summer might be returning back to their home countries. Unfortunately return to China from abroad hasn't got any easier. There will be other people of course, who will stick it out a little longer, because we know, and love China, or have families and businesses here. Others will be heading to other cities in China, for something new - so we wanted to find out who's going, and who's staying
In meanwhile 5000+ people have voted (you can check the current result after you vote), have your voice heard!
