Emerging Markets Expert and Founder of Mobius Capital Partners, Mark Mobiushas said China is likely to relax its Covid Zero Policy by the end of 2022 as the economy struggles and the government needs money “urgently,” Bloomberg reported.

“I don’t think Covid is a problem for the future,” Mobius said answered at the request of Bloomberg News. “China has no choice but to open up to ensure the economy can function. Lip service is being paid to this, but the reality on the ground will be different,” he said.

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The Xi Effect: The emerging-markets expert said he has become “more negative” about China after politics changed with the presidential nomination Xi Jinping to the “summit” of leadership and control of the country. “I fear that the private sector will be suppressed in favor of state-controlled organizations, which will affect innovation and creativity in business,” he said.

Market route: Foreign investors sold a record 17.9 billion yuan ($2.5 billion) of mainland China stocks through trade links with Hong Kong on Monday, with year-to-date investment levels turning into a small net outflow. The stock market collapsed Xi’s power consolidation as expectations grew for the continuation of key policies such as Covid-Zero.

On Friday shares of alibaba group holding ltd BABA were traded over 4% lower in Hong Kong, while Tencent Holdings Ltd TCEHY, Baidu Inc BIDU and meituan MPNGF fell over 5% as mixed gains prompted traders and investors to trim positions before the end of the week.

Continue reading: Larry Summers says that the consensus view that inflation will fall significantly is “outside the realm of normal historical experience.”‘