China will respond to COVID travel restrictions; pausing key subsidies
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An explosion of COVID-19 cases across across China is overwhelming funeral homes and crematoriums, in a development that brings back flashbacks from the early days of the pandemic. It follows the lifting of China's three-year old zero-COVID policy, which implemented strict restrictions - like quarantine and lockdowns - to stop community transmission as soon as infections were detected. Beijing has even done away with reporting and tracking, prompting worries over the virus' spread, the lack of genomic sequencing data and the potential for a dangerous or super-contagious new variant.
Snapshot: The U.S. and U.K. are reintroducing compulsory pre-flight COVID-19 tests for inbound travelers from China, while countries like Japan and Italy are requiring travelers to test upon arrival (and go into quarantine if they are positive). The EU is also moving toward mandating masks and pre-flight testing on arrivals, with the bloc's Health Security Committee drafting an opinion that includes the recommendations. That's in contrast to a stance from the European Center for Disease Prevention and Control, which thinks that the measures aren't justified.
China feels the same way, calling the new testing requirements "discriminatory" and a politically-motivated effort to undermine the government. "We believe that some countries' entry restrictions targeting only China lack scientific basis and some excessive measures are unacceptable," Foreign Ministry spokeswoman Mao Ning said at a press briefing. "We firmly oppose attempts to manipulate COVID prevention and control measures to achieve political goals, and China will take corresponding measures based on the principle of reciprocity in different situations."
Go deeper: As COVID-19 upends the world's second-largest economy, China is reportedly moving away from the costly subsidies it has poured into building a domestic chip industry. The mega investments were intended to help it better compete with the U.S., which passed the Chips and Science Act this past summer. The decision could also have ramifications for spending in other critical areas, especially in industries that haven't produced breakthroughs or achieved self-sufficiency of key technologies.
Related airline stocks: Delta Air Lines (NYSE:DAL), American Airlines (NASDAQ:AAL), United Airlines (NASDAQ:UAL), Air France (OTCPK:AFRAF), Lufthansa (OTCQX:DLAKF), KLM Royal Dutch Airlines (OTC:KLMR).
Related chip stocks: AMD (NASDAQ:AMD), Applied Materials (NASDAQ:AMAT), Broadcom (NASDAQ:AVGO), Intel (NASDAQ:INTC), Micron (NASDAQ:MU), Nvidia (NASDAQ:NVDA), Qualcomm (NASDAQ:QCOM), Taiwan Semiconductor Manufacturing (NYSE:TSM) and Texas Instruments (NASDAQ:TXN).