China’s Covid policies hit carmaking; push to vaccinate elderly faster – business live

Meanwhile in Europe, bookings at easyJet for Christmas, the ski season and other peak periods have bounced back to pre-pandemic levels.

The airline has also dramatically reduced its full-year loss to £178m.

“Peak holiday weeks this winter, such as October half-term and Christmas week in the UK, are back to normal levels of volume,” easyJet said.

However, chief executive Johan Lundgren also warned that in quieter times the airline is still struggling to get enough passengers. It expects to have fully returned to 2019 capacity levels by next summer.

Lundgren said the carrier was experiencing strong demand in peak periods. He told BBC Radio 4’s Today programme:

“We just had a half-term in October that was strong, we see strong demand for Christmas, for new year, for the ski season where easyJet is the largest airline in Europe to the ski markets.

European stock markets are ralling in early trading too, on hopes that China might curb some of its stringent Covid curbs.

The FTSE 100 index of blue-chip shares has hit a three-month high, gaining 64 points or 0.85% to 7538 points, the highest since mid-August.

With China now pushing to vaccinate elderly people faster, Asia-Pacific focused companies such as Prudential (+6%) and Standard Chartered (+3%) are in the top risers.

Mining giants Rio Tinto (+3.3%) and Anglo American (+3.2%) are also benefitting from hopes of further easing of constraints on activity, as is luxury goods maker Burberry.

The crackdown on demononstrators overnight in China also appears to have squashed protests at several cities, although it’s not clear for how long.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, explains:

‘’Police in China have quashed mass Covid demonstrations for now, helping stocks regain their footing on indices across Asia, setting the tone for a positive open in Europe. But with the strict Covid policy continuing there is every chance protests will bubble up again, adding another laying of complication for an economic recovery.

Worries about fresh supply chain snarl ups have been weighing on investors’ minds as fresh waves of infections hit cities across China, with stocks on Wall Street falling back. Apple is the example of how lockdowns can disrupt shipments given that iPhone production is reportedly taking another knock as its supplier’s megafactory in Zhengzhou is hit with a lockdowns and a workers’ revolt.

Hopes that China might ease its Covid controls have helped to drive the oil price up, after it hit its lowest level in almost a year yesterday.

Brent crude has gained almost 2% to $84.69 per barrel, also lifted by talk that the Opec+ cartel might cut production again.

After Monday’s losses, Chinese markets are rallying back today with Hong Kong’s Hang Seng surging more than 4% in late trading.

The Hang Seng Tech Index is up by more than 5.5%, while the Shanghai Composite rallied over 2% on hopes that Beijing would announce new measures to fight the pandemic.

Victoria Scholar, head of investment at interactive investor, tells us:

Markets were pushing higher overnight in anticipation of this morning’s Covid briefing held by China’s health authorities at 3pm local time in which they announced plans to increase vaccinations for the elderly and to reduce the time gap between basic vaccination and boosters to three months for those aged 80 and above.

The authorities insisted that people’s complaints are about extra Covid measures and a one-size-fits-all approach rather than the measures themselves.

Chinese covid vaccine company CanSino Biologics jumped more than 6% after China announced plans to ramp up its vaccination efforts. The Chinese yuan is also rallying by around 0.6% against the US dollar as the risk-on mood dampens investor appetite for the greenback.

China has announced it would bolster vaccination among its senior citizens.

China’s National Health Commission has announced the push, as pressure builds to move away from its zero-Covid policies amid the worst outbreak of the virus yet in the country.

Reuters has the details:

China will step up efforts to increase the rate of vaccination for people aged above 80 and will shorten the time gap between basic vaccination and booster shots to three months for the elderly, the commission said.

People aged 60 and above who have received two doses inched up from 85.6% in August to 86.4% in November, while the booster rate rose from 67.8% to 68.2% over the same period, according to official data

This could be an important step towards reopening China’s economy.

Bloomberg says:

Authorities plan to push shots harder in places like nursing centers, while making those unwilling to get inoculated provide a reason for their refusal, according to a statement Tuesday from the National Health Commission.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Nearly three years into the Covid-19 pandemic, China’s stringent zero-covid restrictions are hurting its carmaking industry again, as infections jump at a record pace.

Production at several automakers has been disrupted, either because staff can’t get to their workplace or due to shortages of components.

Honda Motor, for example, suspended operations at three automobile plants in Wuhan on Monday –because employees were unable to go to work due to citywide shutdowns

A factory in Chongqing, which makes general-purpose engines, will be largely shut down until December 2, Honda said, while production at another auto plant in Guangzhou is being adjusted.

Honda said.

“While closely monitoring the situation, we will strive to minimize the impact.”

Production at Volkswagen’s plant in Chengdu – which it operates with local partner FAW Group – has been halted for the past week due to rising coronavirus cases.

Two of the five production lines at another plant, in Changchun, is also on hold – due to a lack of available parts.

A VW spokesperson has explained that other plants are stable but that the situation is volatile, as lockdowns and restrictions continue to inhibit growth.

BMW also fears further Covid-related lockdowns in China next year which would disrupt demand for its fully-electric models and expectations of stable global sales.

“In China, lockdowns are currently increasing, not decreasing,” Chief Executive Officer Oliver Zipse said to reporters at an event late last week:

“I am worried about how we get out of the lockdown situation in future quarters. There is no visibility that China has a solution.”

Other automakers have been scrambling to adjust their production, although others say they’ve not been hit yet, as Bloomberg reports:

Motorcycle maker Yamaha Motor Co is partially suspending production at its motorcycle plant in Chongqing, where 8,721 new Covid cases were reported on November 28.

Other Japanese carmakers including Nissan Motor Co., Mazda Motor Corp. and Mitsubishi Motors Corp. told Bloomberg their China operations haven’t been impacted yet.

Toyota Motor Corp., the world’s No. 1 carmaker, is adjusting production at parts of its Chinese factories due to multiple factors, spokeswoman Shino Yamada said, declining to elaborate.

Investors will be watching China closely, where police have been stamping out zero-Covid protests after a wave of civil disobedience last weekend.

Also coming up today

On the economic front, we find out how many UK mortgages were approved last month. Economists expect a fall, after the mini-budget rocked the markets. Germany will release its preliminary inflation report for November, while Canada will report Q3 growth figures.

EasyJet, Topps Tiles and Greenore Group are reporting financial results.

And Octopus’s takeover of collapsed energy supplier Bulb could be rubber-stamped, at a court hearing in the City of London’s Rolls Building.

The agenda

• 8am GMT: Switzerland’s Q3 GDP report

• 9.30am GMT: UK mortgage approvals and credit card lending data for October

• 10am GMT: Eurozone consumer, economic and industrial confidence report

• 12.35pm GMT: Bank of England MPC member Catherine Mann takes part in a panel discussion on “policy solutions, fiscal and monetary”

• 1pm GMT: German inflation report for November

• 1.30pm GMT: Canadian Q3 GDP

• 2pm GMT: US house price index for September

• 3pm GMT: Andrew Bailey, governor of the Bank of England, faces the House of Lords Economic Affairs Committee.