Chinese financial markets are flashing warning signs that another round of Covid shutdowns could create more turmoil for the economy. The Hang Seng China Enterprises Index of stocks has lost almost 9% since June 28 as a new Covid subvariant threatens to paralyze factories, dampen consumer spending and hurt construction activity. China’s yuan, meanwhile, is renewing losses against the dollar, with the onshore rate the weakest in a month. Credit stress is also intensifying as China Evergrande Group teeters near its first onshore default, after another developer’s $1 billion delinquency revived broader contagion fears . And iron ore prices have fallen to a seven-month low. A bullish case on China based on value alone keeps failing, as does the notion that the country’s assets can be a trusty refuge for investors during periods of global market turmoil. The renewed risk-off sentiment shows how Covid Zero and crackdowns on the […]