Prof G Markets: Upheaval at Twitter, Airbnb and Uber Earnings, and the Chinese Markets

COVID Policy

China's stringent COVID policy is significantly impacting its economic landscape. Ed Elson highlights that the country's factory activity has declined, with the purchasing managers index dropping from 50.1 to 49.2, indicating contraction 1. Despite this, President Xi Jinping remains committed to the zero COVID policy, prioritizing control over economic growth. Scott Galloway notes, "The CCP has said, no, we're all about China, the CCP, the middle class first," reflecting a shift away from a purely economic focus.

The CCP has said, no, we're all about China, the CCP, the middle class first.

--- Scott Galloway

This approach has led to a decoupling from Western capitalist ideals, which could have long-term implications for global economic relations 1.

   

Market Comparisons

The Chinese market's performance starkly contrasts with other global markets, highlighting the effects of its internal policies. Scott Galloway points out that the Chinese stock market is down 34% year-to-date, compared to the Dow's 12% decline 1. The Hang Seng index is notably the second worst-performing major global index, following Russia's. This downturn is partly due to China's focus on control over economic expansion, as Scott explains, "They are willing to kneecap the markets and even dampen their own economy if it means putting what they believe is the right version of their society first."

They are willing to kneecap the markets and even dampen their own economy if it means putting what they believe is the right version of their society first.

--- Scott Galloway

Such policies have led to a cooling of Sino-Western relations, which could have broader implications for global economic stability 1.