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Asian share prices fared less well than Europe’s as the Delta variant has spread through the region, largely under the weight of China’s new restrictions on movement.
In addition to cracking down on its tech sector, China also had imposed a “zero tolerance” policy regarding COVID’s Delta version, which spurred authorities to close down one terminal at the world’s third largest port after a single case of the virus was found there.
“The leadership views the economic cost of the zero-tolerance policy as manageable and much preferable to the uncontrolled spread of COVID-19,” China analyst Ernan Cui at Gavekal Research, told the Financial Times.
“That means domestic travel and consumer services will continue to be depressed by restrictive measures for at least the rest of 2021 and that prospects for reopening international travel are remote at best,” he said.
TREND FORECAST: We agree with the analysis and forecasts made by Eran Cui. We suggest it is illogical to expect economies to grow as governments impose draconian restrictions. That China would close down a major shipping terminal because a worker had tested positive for the coronavirus not only seems illogical, but it will also negatively affect the supply chain which will in turn drive up prices and inflation.