As COVID-19 spreads in China and the world’s second largest economy with a overwhelming wave of new infectionsshares of China-based funeral and healthcare companies are rising.

The stock market game may not be over as the country had yet to officially lift its quarantine restrictions or travel restrictions. which come into force on January 8th.

What happened: China will reopen borders and lift quarantines after downgrading the COVID-19 threat on Jan. 8, but new cases are already rising, leading to understaffed and overcrowded hospitals.

In the weeks leading up to the easing of COVID-19 lockdown measures, shares in China’s largest cemetery operator, Fu Shou Yuan International Groupturned a 35% loss for the year into a nearly 15% gain.

Shijiazhuang Yiling Pharmaceutical Group is up almost 59% this year.

Huatian Hotel Group Co. is up about 13% in the last month.

The rush to reopen the country comes as the Chinese economy struggled with the negative impact of widespread lockdowns; notably falling retail sales in November and unemployment hitting a six-month high.

Why it matters: Despite recent signals from China’s top officials that they will return in 2023 to focus on growth and bet on easing pandemic restrictions to boost the economy, it’s safe to assume these leaders are unaware of the sudden surge in cases were prepared.

If that had been the case, according to Bloomberg, the Chinese government could have used the three years it has spent battling the virus to strengthen its healthcare system by creating more critical care facilities and stockpiling medicines.

China could have launched a massive vaccination campaign targeting the millions of vulnerable seniors who were unwilling to be vaccinated or receive a booster shot.

But it didn’t a lot of it.

Stocks to watch: Chinese ETFs incl Global X MSCI China Real Estate ETF CHIR, KraneShares CSI China Internet ETF KWEB, KraneShares Hang Seng TECH Index ETF