China to face new pandemic challenges
The Hang Seng fell 4.1% and the Shanghai Composite dropped 2.1% earlier today that was triggered by regulation worries after a crackdown on education companies.
New regulations ban firms that teach school curriculums from making profits, raising capital or going public.
For the broader macro economy, that's a non-event but what is worth worrying about is covid in China. The delta variant is much more transmissible and will increasingly challenge China's strict controls to stop it -- similar to what's unfolding in Australia.
Just now, the city of Nanjing -- population 8.5m -- has gone into a strict, stay-at-home lockdown after an outbreak that was believed to begin at the airport. Officials reported 76 new cases yesterday.
Chinese lockdowns match the true definition of the word and are a major curb on economic growth.
It seems to me that we're going to have a painful transition towards living with covid in the places that have prided themselves on total suppression.
