Tommy Wu, Chief Economist at Commerzbank, believes the Chinese economy is likely to rebound sooner than anticipated, thanks to the sudden reopening from Covid.
The Government seems willing to give priority to economic recovery in 2023
“First, the speed of the outbreak is probably much faster than expected, as most people have been infected or will become infected within weeks of the 180-degree turn in Covid policy made at early December. Cities are currently plagued by infections. But the infections will spread as many households take advantage of the Chinese New Year holiday, which begins on January 22, to travel to their hometown or for leisure. “
“Next, once the majority of the population is infected by Covid, or at least the perception that it is given the lack of reliable data, people will feel comfortable going out and spending again. This will facilitate a Full blown recovery. Economic activity could pick up significantly in the second quarter, or even as early as March, much sooner than we and the markets expected.”
“It also seems unlikely that the authorities will re-impose controls despite the rebound in infections. The government seems willing to prioritize economic recovery in 2023 and seems to prefer to end the Covid situation quickly in order to jump-start the economy in instead of making it longer.”
“The sharp 180-degree turn in Covid policy, uncharacteristic of the Chinese government, poses an upside risk to our 2023 growth forecast, which currently stands at 4%.”
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.