Thousands of people were taking to the streets in some large cities across China in a rare protest against the government’s stringent COVID policy and its communist regime. Many dared to call for Chinese leader Xi Jinping to step down.

In the unprecedented demonstration, a group of protesters in Shanghai shouted early Sunday, November 27: “Down with the Chinese Communist Party, down with Xi Jinping.”

Reuters cited witnesses and videos on social media describing that there were clashes between police and the protesters who vented their frustration over the government’s COVID restrictions.

The civil unrest took place after the number of COVID infections surged, prompting cities and provinces to take more control measures.

According to CNBC, civil protests broke out in Beijing, Shanghai, Wuhan and Lanzhou, among other cities.

In addition, students staged protests at many universities over the last three days.

Because a large-scale protest has rarely occurred in China, so the world is watching to see how Beijing deals with the brewing crisis.

In response to the unrest, the Hang Seng index in Hong Kong fell 1.57% on Monday (Nov. 28), while the Shanghai Composite Index in mainland China lost 0.75%.

Economists are raising concerns about the unrest in the world’s second largest economy.

Reuters gathered a lot of comments from the market watchers.

Gary Ng, an economist at Natixis in Hong Kong, said that the market does not like the protests in China and investors will become more risk-averse.

He added that the China-linked markets such as Australia, Hong Kong, Taiwan and Korea, could see a larger impact from this kind of uncertainty.

Alvin Tan, a forex strategist at RBC Capital Markets in Singapore, said that the protests have caused pressure on the yuan and China-related assets as the market prices in political risk.

He claimed that the scale of the protests will certainly elicit a response from the Chinese government.

He said: “Apart from the risk of further political unrest, near-term COVID risks continue to mount as winter approaches. Much tighter restrictions with associated economic disruptions are more likely in coming weeks than an abrupt loosening.”

Robert Subbaraman, Chief Economist at Nomura, said that the social unrest is further weakening China’s economy.

However, he hopes the protests could lead the Chinese government to set a clearer plan on how to learn to live with the COVID pandemic.

Ken Cheung, Chief Asia Forex Strategist at Mizuho in Hong Kong, said that the outbreak of the social unrest reflected the prevailing fatigue towards Covid lockdowns.

This factor will likely suppress consumption, and China’s economic growth outlook should remain grim in the fourth quarter of this year.

Martin Petch, vice president of Moody’s Investors Service, said that he hopes the protests would dissipate quickly and without resulting in serious political violence.

He added: “However, they have the potential to be credit negative if they are sustained and produce a more forceful response by the authorities.”

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