10.06.202210:05 Forex Analysis & Reviews: We rejoiced early: China is again introducing anti-Covid restrictions

In early June, Shanghai threw off the Covid shackles that had limited the life of the metropolis for two months. But it seems that the freedom was short-lived: some areas of the business center are closing again.

Shanghai, which recently lifted coronavirus restrictions, is reporting new cases.

This week, the popular beauty salon Red Rose has become the center of attention of the city authorities.

In the institution, which resumed work on June 1, three cases of infection were recorded at once. Preliminary epidemiological examination showed that some salon employees did not undergo daily testing for COVID-19, as required.

In light of the latest statistics on the incidence of coronavirus on Thursday, the Shanghai authorities announced the introduction of new quarantine restrictions in several parts of the city at once. It was also announced to conduct mass rapid testing for COVID-19 for millions of its inhabitants.

One of the first to announce the resumption of restrictions was the southwestern district of Shanghai, Minhang, where more than two million people live.

On Saturday, the largest recent diagnosis of cases of coronavirus infection will take place here. The residents of Minhang will be tested to detect nucleic acid. During this period, they should stay at home.

Six other districts of Shanghai also intend to conduct mass population testing in the next few days. According to preliminary estimates, the new restrictive measures will affect more than 25 million residents of the metropolis.

Of course, the Shanghai residents, pretty tired of the prolonged lockdown, are now on edge. No sooner has the city really returned to normal life, than it is again threatened with isolation.

Meanwhile, coronavirus unrest is also intensifying in the Chinese capital. On Thursday, one of the most densely populated areas of Beijing – Chaoyang, home to more than three million people, announced the closure of all entertainment venues and Internet cafes.

Increased nervousness is also felt in the markets. Yesterday, the Chinese blue chip index CSI300 closed down 1.1%.

Investors continue to flee from risky to defensive assets. They are well aware of what the next strengthening of quarantine in China may turn out to be for the world economy, because you don't have to go far for an example.

A strict 2-month lockdown in Shanghai, the closure of shopping malls and other public establishments throughout Beijing, and restrictions on movement imposed in many Chinese cities have caused enormous damage to the country's economy this spring.

And disruptions to global supply chains caused by restrictions in China have slowed international trade and jeopardized the growth of the entire global economy.

Despite the partial weakening of the lockdown in Shanghai in early summer, the business climate in China is still negative. And it's all the fault of the zero tolerance policy for COVID-19, which the government of China continues to adhere to.

While other countries are trying to live with the coronavirus, China is trying to eradicate COVID-19 in the bud. Well, let's wait and see where this will lead the world's second largest economy...