COVID death in Beijing threatens China stocks rally, situation ‘grim’ as more government restrictions feared

November 20, 2022, 4:20 PM UTC
Will tighter COVID curbs return in China?
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China’s first COVID-related death in almost six months has sparked concern that Beijing could see a return of heightened restrictions on schools, restaurants and shops amid a continuing outbreak in the capital. 

An 87-year-old man died in Beijing on Saturday after his condition worsened, the official Beijing Daily reported. He first displayed COVID symptoms on Nov. 11 and was confirmed infected two days later, according to the report. It was the first documented death from COVID since May 26, when officials in Shanghai reported one fatality.

The COVID control situation in Beijing is “grim” as many areas face hidden risks of the virus spreading in the community, Xu Hejian, an official with the municipal government, said in a briefing on Sunday. The city reported 516 new local COVID cases as of 3 p.m. Sunday.

Some shopping malls in Beijing, including Joy City in Chaoyang district, the epicenter of the latest outbreak, have shuttered all businesses except food take-away services from Sunday, Beijing Business Today reported. Schools in several districts of the capital have told parents they’re moving to online learning from Monday until further notice. There has been no official confirmation of any district- or city-wide school closures. 

Yang Beibei, deputy head of Chaoyang district, proposed that residents continue to avoid unnecessary trips outside the district in the coming week and use flexible means such as video conferencing to work from home.

The latest fatality attributed to COVID could test the tolerance of Chinese authorities, who earlier this month narrowed some curbs in a move many took as a sign of a shift away from its strict zero-tolerance policy. After being largely isolated from the rest of the world for the past three years, China shortened quarantine times for inbound travelers and close contacts, and ended a system that suspended international flights tied to too many infected passengers. 

A COVID hit to the China stocks rally?

News of the new fatality could also damp a rally in Chinese equities, which have rebounded on new-found optimism around President Xi Jinping’s policy pivots in support for the property market and a more targetted approach to COVID. The MSCI China Index jumped more than 20% this month, poised for its best performance since 1999. 

China’s persistent outbreak increases the likelihood of additional deaths, as it can take several days or weeks before someone who has contracted COVID to turn seriously ill. The country reported a total of 23,238 new infections for Saturday, 180 fewer than Friday.

Authorities in the southern hub of Guangzhou once again extended some curbs for the downtown district of Haizhu, until Nov. 22, after the city reported 8,483 cases for Saturday. Schools in seven of Guangzhou’s 11 districts will remain closed next week, municipal government spokesman Chen Xueming said at a briefing Sunday.

Low vaccination rates among elderly and vulnerable citizens remain one of the biggest hurdles for the country’s reopening. Only 66% of those aged 80 and above are fully vaccinated and only 40% have gotten a booster. That compares with a vaccination rate of more than 90% for seniors in the US. 

The People’s Daily, the Communist Party’s flagship newspaper, said on Friday in its fourth commentary since the changes to COVID rules were announced that China is improving virus control measures and isn’t relaxing or “lying flat.”

China’s top health authorities said they are preparing for future infections by building more hospitals to treat COVID patients and ensuring that intensive care units account for 10% of all beds. 

—With assistance from Jing Li.

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