Markets rewarded investors who bet on China’s stock market bottom. KraneShares CSI China (KWEB) bottomed at below $20 in October. When the Chinese people protested about the dynamic zero Covid lockdowns, everything changed.
The Chinese Communist Party recently completed the re-appointment of President Xi at the National Congress. This freed it to reverse its Covid policy.
KWEB stock is one way to bet on China’s rebound. The ETF stalled at $30 recently. Markets are fearful of the devastating consequences of China’s abrupt re-opening.
Poor Health Care Infrastructure
China does not have an adequate healthcare system. People are unwilling to visit the local health care services. Instead, they clog the hospitals in the main cities.
The government vaccinated most people in the low-threat age with Sinovac. This locally-made vaccine is reportedly inferior to mRNA-based vaccines. China requires an immediate shipment of Moderna (MRNA) and BioNTech (BNTX) vaccines to protect its people.
Over 60% of the elderly are not vaccinated. The government did not convince them of the importance. As a result, morbidity rates are climbing.
Supply Disruption
Risks are rising and too many people are falling ill. They cannot attend work. This will disrupt the global supply chain.
Watch out for companies like Apple (AAPL) reporting weaker sales in Q4. In addition, expect energy price volatility as China’s economy slows down.
