Expert warns protests, COVID-19 restrictions in China could affect New Zealand's markets

As China tightens security against protesters demonstrating COVID-19 restrictions, New Zealand is being warned to watch them "very closely" as they could affect our markets. 

Hundreds of demonstrators and police clashed in Shanghai on Sunday night (local time) as protests over China's stringent COVID restrictions flared and spread to several cities in the wake of a deadly apartment fire in the country's far west.

The protests turned violent and aggressive, with footage emerging showing the shocking moment BBC journalist Edward Lawrence was beaten and arrested by police in Shanghai.

On Monday, there was no sign of new protests in Beijing or Shanghai, but dozens of police were in the areas where the demonstrations took place as security measures ramped up. 

Commentator Bernard Hickey told AM on Tuesday the protests and the ongoing lockdowns in China could have a major impact on New Zealand's economy. 

"I think we certainly need to watch this very closely. It has been described as the worst civil unrest in China since the Tiananmen Square events," Hickey told AM co-host Melissa Chan-Green. 

"You've got to remember it's not just a social event, it's an economic one as well because about 65 percent of China's GDP is covered by these cities that are in various stages of lockdown. It means that many consumers are unable to go to their restaurants and unable to go out and buy what they want. It also restricts the movement of things like trucks and trains, the flow of goods in and around China."

If the protests continue, there are the risks restaurants will stay empty, with locals buying less beef, lamb and milk powder from supermarkets decreasing demand across the globe, Hickey said.  

"China is our largest export market, but it's also the largest export market for Australia, and Australia is our second largest export market," he said. 

"We go to watch what's happening with consumers in China and at the moment they're feeling quite down, as you'd expect and you've got to watch what's happening with the Chinese economy because it's growing at the slowest rate it has pretty much since the Tiananmen Square events," he said. 

"Even though our exports to China have held up quite well until now, there's a risk that as people stop going to the hotpot restaurants, they buy less lamb, they're buying less beef, they're buying less goods that include milk powder, which we see it start to affect our export receipts." 

Chinese political commentator Einar Tangen told AM on Tuesday there's a tremendous amount of tension in China.

"With everybody watching the World Cup and seeing the stadiums full of people and players hugging each other and not a mask in sight, they feel that they're missing something," Tangen said. 

"If you add up all the cities that are involved, maybe a few thousand people, but you can definitely see that people are frustrated and the government is paying attention."

Watch the full interviews with Einar Tangen, Bernard Hickey and John McKinnon above.