China’s country-specific exchange traded funds plunged Monday, with Chinese equity markets suffering its worst day in over two years. Beijing’s zero-tolerance COVID-19 lockdown measures fuel concerns over the economy’s growth outlook.

On Monday, the iShares MSCI China ETF (NASDAQ: MCHI) fell 2.5%, the Xtrackers CSI 300 China A-Shares ETF (ASHR) declined 6.0% and the SPDR S&P China ETF (NYSEArca: GXC) decreased 2.8%.

China’s capital, Beijing, could implement lockdowns to contain a spike in COVID-19 omicron cases as strict lockdowns in Shanghai extend to a fifth week, the Wall Street Journal reports. Beijing officials have already begun mass COVID-19 testing for people living or working in the city’s Chaoyang district to monitor the spread of the newest variant.

In response, economists have cut their outlook on China’s economic expansion. The International Monetary Fund last week downwardly revised its 2022 growth forecast for the emerging market to 4.4%. Banks are also downgrading their projections. Meanwhile, foreign investors have yanked billions of dollars out of Chinese stock and bond markets.

The Shanghai Composite and CSI 300 indexes pulled back 5.1% and 4.9%, respectively, on Monday, marking their single largest session percentage declines for both benchmarks since February 2020, when news of the fast-spreading coronavirus first began to weigh on global markets during the beginning of the pandemic.

The market is recognizing “economic recovery will be delayed and the situation in China could be more uncertain, especially in the near term, because of the Omicron situation,” Jason Liu, the Asia head of the chief investment office at Deutsche Bank’s international private bank, tells the WSJ.

“The market is starting to realize that the overall stimulus measures from China could be smaller than expectations or quite delayed, especially on the monetary side,” Liu adds.

Many analysts have warned that the new restrictions could be the largest threat to China’s economic growth outlook. Xuan Wei, chief strategist of Beijing-based China Asset Management, cautions that the lockdowns this time around could hurt even more in the second quarter.

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