World

‘Carnage’ Hits Chinese Markets Amid New COVID Surge

(Photo by WANG ZHAO/AFP via Getty Images)

Dylan Housman Healthcare Reporter
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China’s markets are being shocked by a new wave of COVID-19 infections and lockdowns in the country, as well as tense relations with the West over Russia’s invasion of Ukraine.

Stocks listed in Hong Kong had their worst day since the 2008 financial crisis Monday, according to Bloomberg, tanking by 7.2%. The Hang Seng Tech Index, launched in July 2020, fell by 11% in its worst day ever, obliterating more than $2.1 trillion in value.

Chinese traders are allegedly concerned that China could face economic backlash after reports surfaced that Russian President Vladimir Putin requested military assistance from Beijing with his invasion of Ukraine. China denied the report, but President Xi Jinping has expressed more support for Russia than virtually any other country since the invasion began, particularly at the United Nations Security Council. Beijing remains the only major global power that hasn’t condemned or sanctioned Russia for the invasion.

In the U.S., Chinese stocks are in the midst of a 72% decline in the past year, beginning after Xi cracked down on tech companies like Alibaba. The crash is nearing the severity of the 78% drop that occurred in the 2000’s dot-com bubble in the U.S. (RELATED: Below Their Lines: American Corporations Cancel Russia But Remain Silent On Uyghur Genocide)

Meanwhile, the country is dealing with its worst COVID-19 surge since around the time the pandemic began, with 3,507 locally-spread cases reported Tuesday. Beijing has taken a “zero-COVID” approach to the pandemic, imposing draconian lockdowns and monitoring policies at the first sign of an outbreak anywhere in the country.

Authorities have locked down two major cities, Shenzhen and Changchun, and placed more than 50 million people under restrictions. Economists worry the lockdowns could further interrupt already-stressed supply chains, as cities like Shenzhen are major suppliers of tech products and consumer goods.

China’s crackdown drove the price of oil back down below $100 per barrel after sanctions on Russia caused a spike in price, according to The Wall Street Journal.