New coronavirus cases in Australia have been negligible for two months now, and yet, restrictions against normal human activity in the country continue. You can read about them, province by province, over here. Australia’s lockdowns have been extremely strict, but also unpredictable. Every few days we hear of one easing up and another one going into effect. Melbourne ended the country’s strictest lockdown at the end of October, but then the whole state of South Australia went into another severe 6-day lockdown after a cluster of 23 cases was found a few days ago.
Australia has proven to be frenetic with lockdowns, very quick to shut down local economies entirely over any sign of virus activity. Obviously this method of managing the situation has had a seriously negative effect on business, especially casinos, to the point that investors with any significant amount of capital there should seriously consider pulling out entirely. I believe at this point that any stake in Crown Resorts especially, should be liquidated. The stock has had a nice 16% bump since Melbourne came of out lockdown, and it’s now time to get out.
It’s not even the lockdowns themselves that are the biggest problem here. Much worse is the inherent unpredictability of it all. If Australia had a lockdown policy something along the lines of “OK, we’re going to try this one more time for X days all over the country and after that no more lockdowns period,” that would be one thing. It might provide some rational base for some kind of economic calculation. But of course virus clusters will keep reappearing and seemingly the severe responses will keep coming. How anyone is supposed to invest in such an environment is beyond me.
Australia also has another serious covid problem though, triggered by its support for an international investigation on the origins of the virus back in April. China’s Communist Party was none too happy about this initiative, and so Xi Jinping has responded with the wrath of the punitive tariff. Australian barley, beef, wine, coal, and cotton are all being targeted, and this is no small matter. China is by far Australia’s biggest trading partner, with 40% of Australia’s exports going to the Chinese, and 27% of its imports coming from there.