Counting cost of China unrest
DEMOS TRIGGERING MARKET UNEASE
PROTESTS against China’s harsh Covid measures sent shockwaves through financial markets yesterday, with the price of oil crashing to an 11-month low.
Anti-lockdown demonstrations flared up across China in response to the leadership’s draconian zero-tolerance rules.
The rare unrest, a critical test of Chinese President Xi Jinping’s rule, added to uncertainty about the outlook for the world’s second-largest economy.
China’s stock market posted its worst one-day fall in a month.
The price of crude oil dropped below $81 a barrel at one point before recovering to $83.
Russ Mould, from investment firm AJ Bell said: “China is a rapacious consumer of global commodities and signs economic activity is being disrupted by the mounting dissent in the country will be seen as negative for demand.” Susannah Streeter, senior markets analyst at Hargreaves Lansdown, said the unprecedented waves of protest in China had “caused ripples of unease across financial markets”.
She added: “Already pockets of violence have erupted as police forces push back at protesters, but there are expectations that a much more stringent security clampdown will be ordered.” Investors are spooked about the possibility of China imposing stricter rules and measures to curtail the length and spread of protests.