China conference, currency trading hit amid Covid surge

China's central economic work conference will be delayed due to surging Covid infections in Beijing which has dragged down currency trading volumes with several traders infected.

There's no set timetable for when the conference, due to begin tomorrow, will be rescheduled, sources said.

The conference, where officials discuss policy objectives for the coming year, is attended by President Xi Jinping, members of the Politburo, provincial governors, and heads of government agencies and financial institutions. In the past, the meeting would last three days, with a readout published in state media at the end.

With the unexpected about-face injecting more uncertainty into an already fragile growth outlook, economists had been expecting officials to signal looser fiscal and monetary policy and more easing in the property market to bolster growth.

A target for next year's economic growth would also usually be discussed at the conference, although it won't be disclosed until the annual legislative meeting in March.

The economy is expected to grow just 3.2 percent this year, the slowest pace since the 1970s barring the pandemic slump in 2020, according to economists surveyed by Bloomberg.

China this month called an abrupt end to its strict pursuit of zero Covid, scrapping most testing and isolation of infected patients. Signs are now emerging that the virus is spreading rapidly, including in Beijing where there are long lines at hospitals and a growing shortage of medication to treat fevers.

The Covid wave is also rippling through the nation's financial industry.

A sudden uptick in the number of sick traders was one reason behind the drop in onshore yuan-dollar spot volumes to the lowest level since April on Monday, said sources.

Half of the currency traders at one Chinese bank in Beijing were off sick as of Monday and the process of executing and confirming trades has slowed considerably for many market participants, exacerbating a seasonal dip in activity at year-end, they said.

To cope with the surge in cases, financial firms are checking temperatures, telling staff with symptoms or positive tests to stay home, asking some traders to work in split teams, and activating backup trading desks.

A spokeswoman for Standard Chartered (2888) said it has a continuity plan that covers pandemic outbreaks and is taking actions to protect the health and safety of its employees, without sharing further details.