A choppy outlook for China heading into a likely H2 2023 reopening

Reopening pressures have increased, as recent protests test policymakers’ resolve to stick to the current zero-Covid approach. Indeed, state media are already using softer language on Covid controls and some cities are relaxing restrictions despite still-high caseloads.

What you will learn:

• A much earlier exit from zero-Covid could lead to an unmanaged spike in cases and fatalities. But policymakers will be acutely cognizant of the risks of such a scenario.
• It’s also possible that an early exit could be orderly, particularly if vaccine development and medical preparedness ramp up to the extent that an eventual exit wave of Covid cases is well-managed.
• Conversely, delaying reopening would impose higher-for-longer economic costs. Growing public fatigue over recurrent lockdown measures also raises the risk of social instability.