After days of antigovernment protests across China, there was further uncertainty on Tuesday as the country’s worst-ever Covid-19 surge finally began to wane and the government signaled it would ease virus restrictions.
In response, stock markets on the mainland and in Hong Kong took another dizzying turn, closing up roughly 3% after falling in the same range the day before.
Authorities will also roll out measures to increase vaccination rates, particularly among senior citizens, officials said Tuesday at a press conference hosted by the National Health Commission (NHC). Low vaccination rates among this vulnerable older cohort have been a long-running concern.
“We will ease Covid restrictions as fast as we can, based on each area’s particular conditions,” said NHC spokesperson Mi Feng.
The news comes after a month-long surge of cases hit record levels, causing the government to reverse its earlier promises to ease its controversial zero-Covid policy, which has crippled China’s economy with swift lockdowns, supply-chain interruptions, and business closures.
Last week, a fire in China’s west killed 10 people after firetrucks were unable to access a building because of anti-Covid-19 fences and barriers. Outrage in the city, Urumqi, swelled into local protests and dissent online. Throughout the week, however, more protests sprung up in several cities across the country, including in Beijing and Shanghai.
As the gatherings spread, protesters’ complaints grew from merely criticizing the zero-Covid policy to directly calling for the Communist Party and leader Xi Jinping to step down—utterances punishable by years in prison in China.
By Saturday, the size of the protests seemed to have caught police off-guard, with swaths of chanting citizens marching through the streets of Shanghai. By late Sunday, authorities had dispatched huge numbers of police to several cities and arrests by the van-loads began.
The central government-run press conference, which was broadcast live, repeatedly blamed local-level officials for “overzealous” imposition of lockdowns and for requiring testing more than was necessary. The half-hour conference took questions only from state-run media outlets, until one foreign reporter was allowed to speak at the end.
“Given the recent protests in the country, we would like to ask whether the government of China is reconsidering the Covid policy here,” a journalist from Reuters news agency said in English.
An interpreter for the panel of officials refrained from translating the word “protests,” instead using a Chinese phrase meaning “dissatisfaction from some regions.”
Spokesperson Mi replied: “We have been and will continue to re-evaluate our Covid policy based on scientific evidence and will minimize the restrictions’ impact on the economy.” None of the officials answering press questions addressed the protests.
The conference also came as new daily cases finally dropped, after a month of rapid increases. After a record-high 40,347 daily cases were announced Monday, today the figure fell to 38,421, with zero deaths, according to NHC statistics.
Authorities repeatedly stressed that stronger efforts will be rolled out to inoculate the elderly population, of which fewer than two thirds are fully vaccinated.
“I don’t need the shot, because I don’t even go out,” Yang Yi, a retired teacher of Chinese literature in the city of Chengdu, told Barron’s by phone Tuesday.
As is often the case with policy changes in China, much coordinated signaling was done surrounding Tuesday’s announcements.
On Monday, multiple articles in the state-run People’s Daily said containment approaches must become more targeted. The official Xinhua News Agency said in an article that insisting on frequent Covid-19 testing will not only interrupt people’s livelihoods, but is also a waste of financial and human resources.
Stocks seemed to respond Tuesday.
The benchmark Shanghai Composite Index (SHCOMP) closed up 2.31%, after falling roughly 2% the previous day, while the large-cap CSI 300 Index (000300) climbed 3.09%.
In Hong Kong, the Hang Seng Index (HSI)—which has been one of the worst-performing stock gauges of the past year—jumped 5.24% for the day.