Will the growing protests in China impact global markets?

Last week, the Chinese marched on the streets to protest against the government’s rigorous “zero-COVID” approach, openly defying the Communist Party for the first time in more than 30 years, sending tremors across the global financial markets, which recovered quite quickly a few days later. However, the immediate effect on global markets is causing many investors and analysts to wonder what the future holds for the second-largest economy in the world.

Investors do not always have to suffer the great volatility observed on the worldwide financial markets, as there are financial products that can be used to profit from this quick and significant upward and downward price movements, such as CFD or Contracts For Difference. If you’re a savvy active trader looking for a reliable, fast and regulated CFD broker to take advantage of the Chinese protests on the markets, you might want to consider easymarkets.com.

Why are people protesting in China?

Everything started with a fire that took place on November 24 in the capital city of the Xinjiang province, Urumqi. As the fire in the apartment building resulted in the deaths of at least 10 people and injuries to 9 more, recordings of the event seemed to show that the lockdown procedures slowed down the response time of firemen.

Chinese people are tired of this zero-Covid policy preventing them from living their lives, so they started to demonstrate in Urumqi, which then spread across China in an unprecedented movement that represents a real challenge for the leader Xi Jinping and his zero-Covid policy.

In order for China to begin the process of strengthening its economy, the constraints that have been placed on its people in accordance with Covid-19 restrictions need to be loosened, and they need to be given the opportunity to return to normal life.

The problem is that not enough individuals in this country have received vaccinations, and as a result the country has almost no natural protection against the virus. Moreover, China is against the idea of using imported boosters from western Covid vaccines, according to US Intelligence.

Therefore, opening up the nation is not only a problem from a political standpoint, but it also has the potential to result in a disastrous pandemic of the illness.

Are protests in China impacting the global financial markets?

The markets will respond to any new developments as the severity of civil unrest in China rises as a direct result of the government’s zero-Covid campaign.

However, this rigorous approach has had an impact not only on the expansion of the world’s second-largest economy, but also on the operations of a huge number of multinational companies, since China is home to a significant number of international manufacturers, including Apple. The country might even lose its role as the world’s workshop if it continues with the endless lockdowns.

The Party needs to find a way to ease its zero-Covid policy and boost its economy. The way it will do so is very likely to influence how participants perceive the risk of a local and global recession.