China reopens its borders after three-year zero-COVID policy

Yahoo Finance Live anchors report that China has reopened its borders, welcoming visitors without any quarantine restrictions.

Video Transcript

[AUDIO LOGO]

- Something else that we're tracking here in our second big thing this morning, China fully reopened its borders this weekend and began welcoming visitors without any quarantine restrictions after three years of a zero-COVID policy that shielded China's population from the virus and the rest of the world. We were seeing a large reaction in a few different areas, but it's also with the pledges that we're seeing from China. They're looking to really prop up what is the second largest economy.

And it's some of the policies that they're going to enact over that time, the different class structures that this is also going to look to be a boon for. And for some of the businesses as well, they're looking to really remove some of the restrictions and make it more favorable of an environment for everything from tech businesses to some of the financial businesses as well. So that will be interesting to see exactly how that nets out as well in the near future.

- Yeah, I'm really fascinated to see how consumer spending comes back. Does it roar back in China? Because if that's the case, Starbucks, Nike, all these names should really have interesting and, of course, perhaps strong back half of the year.

I'm looking at a good Goldman note raising the possibility of that, in fact, happening, looking a little more optimistic for China's GDP, and, by extension, more optimism on China stocks. The team over at Goldman thinking that the MSCI China Index can rise 15% more really, I believe, off a 30% move so far. So maybe some more gains there.

- Yeah, and Alibaba is actually our top Trending Ticker on the Yahoo Finance platform right now. The sort of catalyst and trigger is not just the reopening more broadly, but also some specific comments from the Communist Party Secretary of the People's Bank of China-- that's Guo Shuqing-- who said that the campaign that China has been undergoing for what feels like a really long time now to focus on changing the internet and tech industry, that that is basically done. There are just a few issues to resolve. But it has largely been closed.

Now, this is something the market has been anticipating. We've seen evidence of this, that it's winding down. But this is interesting that it is official comments that are now coming.

So in particular, we've been seeing a rally in tech stocks, although it has been a broader rally in Chinese stocks as of late. The real estate sector also saw some loosening of regulation. So all of that is helping lift at a time when, let's be honest, China probably needs it, right? The reopening has been quite rocky. There are a lot of concerns about the pace of growth this year. And so it looks like China is trying some different things to try and prop all of that up.

- And within what they're trying, that stimulus, it's going to be interesting to see whether consumers are spending or whether they're saving some of the stimulus that is going to be put into the Chinese economy as well because if there's one thing that we can extrapolate from how the US consumer was able to work with some of the stimulus that we saw early in the throes of the COVID-19 pandemic and then the different waves of that that came forward, people were using that to save for a rainy day in many instances, and then some of them using that to spend and offset where the rises in certain costs for their household were. But I think longer term, if you did see a Chinese consumer that said, you know what, we have more of a propensity to save or sit on this, then that counters what the intention of what the Chinese party was looking to move forward with in putting that stimulus out into the economy as well.

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