Shanghai markets make steep gains amid news of plague and unemployment
Yesterday the stock market rose to +5.71: a 25.29% jump from last March. The gains are the result of ease of access to liquidity. Warnings of bubonic plague in Inner Mongolia: A partial lockdown for the city of Bayan Nur. Due to the closure of many firms during the pandemic, at least 80 million jobs have been lost, not to mention the lives of over 300 million migrants, not figured in official statistics.
Shanghai (AsiaNews) – The indices of the Shanghai stock exchange would appear to indicate a recovery for the Chinese economy after the huge losses incurred during the Covid-19 pandemic.
By 3 pm today the megalopolis stock exchange was at + 0.37%, but yesterday it hit a record of + 5.71%, the highest closing since last February. In addition, the index appears to have risen 25.29% from the lowest point reached during the lockdown on 23 March.
According to analysts, these upward spikes are due to the government imposed easing on bank loans. Last week the People's Bank of China lowered its own currency rate by 25 basis points to inject liquidity into the financial market.
Liquidity is so abundant that - according to Caixin - approximately 1570 billion yuan (198.12 billion euros) were invoiced yesterday between Shanghai and Shenzhen.
Yesterday there was more good news as no new coronavirus infections were reported in Beijing with only 8 new cases across the country.
However, there is also some bad news. The first two days ago an alarm was raised in Inner Mongolia following the discovery of a case of bubonic plague in a breeder. The Bayan Nur Health Commission ordered city residents of about half a million people to stop hunting, not to skin animals, to transport rodents and other animals that act as a means of contagion. The population must also report unusual fevers, and if dead marmots are encountered.
Last November four people were infected: two with bubonic plague; two with the kung pandemic. These four survived, but one Gansu patient died of coronavirus.
According to the World Health Organization, the plague - which is carried by flies and rodents - kills 30% to 60% of the infected.
The other bad news is rising unemployment. Due to the pandemic many small and medium-sized enterprises went bankrupt; at least 63 million of them risk closure.
According to the latest available figures from UBS Securities, 80 million jobs in services, industry and construction have been lost as a result of the pandemic.
Zhongtai Securities puts the unemployment rate in China at 20.5%, with around 70 million jobs lost just because of the coronavirus while official estimates speak of a 5.9% unemployed.
The Economist Intelligence Unit has estimated that 250 million Chinese workers will lose between 10% and 50% of their earnings.
The statistics do not take into account the over 300 million migrant workers. Several tens of millions who returned from the countryside to the cities to work have found their factory closed.