Investors in Chinese capital markets are so desperate for the re-opening of Chinese economy they are grasping for anything that could suggest the easing of Beijing’s zero-Covid policy A mysterious post circulating on Twitter Nov. 1 alleged China’s top leadership is preparing to re-open the nation by March 2023 after nearly three years of rigid Covid restrictions. The post, whose source is unverified, sent major Asian indexes surging in the past 24 hours.
Hong Kong’s Hang Seng index jumped 5 percent on Nov. 1. The Shanghai Composite Index rose more than 3 percent. Both indexes had suffered steep losses in the previous weeks. Shares of Chinese tech companies traded in the U.S., including Tencent and Alibaba, also jumped around 10 percent. Stocks in the Morgan Stanley China Index (MSCI), which include Chinese companies traded globally, have gained a total of $450 billion since the news broke, according to Bloomberg.
The original post, written in Chinese, claimed that Wang Huning, one of President Xi Jinping’s top officials held a meeting on Oct. 30 at the request of Xi with officials from various government agencies to discuss plans to re-open the country by March. China has severely limited international travel and imposed strict PCR testing and quarantine rules domestically since early 2020 when Covid-19 broke out.
The government has not addressed the rumors, which have not been reported in mainland Chinese media.
The post first began circulating on Oct. 31 in WeChat messaging groups, according to Shanghai Macro Strategist, a Twitter account with more than 15,000 followers. It was later shared by prominent analysts, including Hao Hong, the chief economist at Grow Investment Group, a Hong Kong-based hedge fund.
This morning (Nov. 2), Hong tweeted that a regional train station in China’s Guangxi province, in the country’s southwest, no longer requires negative Covid test results to board. “Some take it as signs of easing COVID-0,” he wrote.
Heard that “Reopening Committee” has been formed & led by Wang Huning, Politburo Standing Member. The Committee is reviewing COVID data from US/HK/SG to assess various reopening scenarios, target 03/2023 reopen.
— Hao HONG 洪灝, CFA (@HAOHONG_CFA) November 1, 2022