North American markets have been ignoring the rapid and massive spread of COVID in China that has affected the country after the sudden lifting of zero-Covid restrictions in early December. Incredibly, China’s health chief on December 21 said 250 million people, 18% of the population, fell ill in the first twenty days of December.
It is estimated that 37 million people contracted the disease on December 20 alone. Less popular policies such as mass testing, mandatory quarantines, and frequent lockdowns controlled the virus before major changes were made.
According to the observation, the US Centers for Disease Control estimates that since the beginning of 2020, about 100 million and 4.5 million additional cases of COVID have been reported in the US and Canada, respectively, corresponding to 32% and 12% of the citizens of each country.
It is no wonder that China’s economy has fallen sharply. Traffic congestion in major cities has eased significantly until the New Year as the economy recovers. China’s Purchasing Managers Index (PMI) has dropped to April 2022 readings. Note that a PMI below 50 indicates a recession.
With all of this in mind, it would appear that internet concerns may be resurgent in North America. Such pressures have decreased significantly in the past few months. In addition, disruptions in supply chains could cause prices to rise, which would be an unwelcome development in the ongoing battle of central banks around the world to combat inflation.
Some of China’s COVID-19 data is shocking: on December 23, the health director of the city of Qingdao in Shandong province (about 9 million people) said the city was experiencing “between 490,000 and 530,000” new cases per day. This equates to approximately 6,000 new infections per 100,000 people per day. Similarly, the southern city of Dongguan (population 10 million) is said to see 250,000 to 350,000 new cases each day, or 3,000 for every 100,000 people.
The rates of COVID vaccination in China are very high. According to Reuters, about 86% of Chinese adults over the age of 60 have received at least two vaccinations. By comparison, about 94% of US adults age 65 and older have received at least one vaccine.
However, the Chinese vaccine is less effective than the Pfizer and Moderna messenger RNA (mRNA) vaccines, both of which are 90+% active, which are widely used in North America. The two most widely used Chinese vaccines, CoronaVac and Sinopharm are only seen to be 51% and 79% effective, respectively, according to medical research. CoronaVac and Sinopharm use killed viruses.
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