What happened
Shares of Chinese tech giants Alibaba (BABA 0.20%) and JD.com (JD 1.13%) rose today after the Chinese government said they plan to further ease COVID-19 restrictions. Shares of Alibaba and JD both traded more than 3% higher as of 11:35 a.m. ET.
So what
The Chinese economy all year has been plagued by China's "zero-COVID" policy, which sought to prevent the spread of the virus as much as possible and included wide-scale lockdowns in major cities that really hurt economic growth this year.
But in recent months, the Chinese government has begun to ease these policies in order to boost the economy.
This morning, media outlets reported that the government will remove quarantine requirements for international arrivals next month. This is China's largest move to ease restrictions since the onset of the pandemic.
This is happening as COVID cases are on the rise in China, with patients now flowing into hospitals at a high clip.
Now what
In the back half of this year, the Chinese government has seemingly gone back and forth when it comes to easing COVID restrictions. There would be talk of relaxing them, only for those rumors to be shut down.
Now it would seem there is no going back for the Chinese government, which is moving full steam ahead with easing restrictions even as cases rise. This is probably positive for investors, although it will be important to monitor the situation and how high cases rise.
Ultimately, any further opening of the economy and better economic growth is likely to benefit JD and Alibaba, which are two of the most prominent Chinese tech and e-commerce companies. While the situation could ebb and flow in the near term, these are two names that I would expect to be good long-term buys.
