China will scrap quarantine requirements for inbound travelers. This is a step away from China’s stringent covid policies. But, there are headwinds.

China’s GDP grew 3.9% y/y in the third quarter of 2022. This significantly beat expectations of 3.4% growth. However, markets across China plummeted. The Hang Seng fell more than 6% and both the Shanghai and Shenzhen indexes fell by more than 2%. Alibaba’s stock fell by more than 11%. Why?