Thursday, September 28, 2023
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China moves again, economic outlook bright

By Ellen Zhang and Kevin Yao

BEIJING (Reuters) – Chinese residents are increasingly moving after China’s severe COVID-19 abrupt reversal last month – containment despite a surge in infections, pointing to a gradual recovery in consumption and economic activity this year.

Since Beijing abruptly ended the three-year “zero-COVID” policy earlier this month.

Figure 1: Chinese commuters return to work,

Chart 2: Taking to the skies again,

Still, some indicators show economic activity still Without a full recovery to levels seen just a few months ago, many economists remain cautious about the pace of the economic recovery after a faster-than-expected reopening.

“The broadening pullback in retail spending suggests time will be needed to reverse the negative psychological impact on Chinese consumers of three years of intermittent lockdown,” said Louise Loo, Oxford Economics Senior Economist.

Figures from information providers and industry bodies show that COVID-related lockdowns and restrictions impacted travel, cinema and car purchases last spring and early winter.

Graphic 3: Back to the movie,

Graphic 4: China’s car sales hit by COVID Harm of restrictions,

Also, Loo says rapid recovery of household mobility during pandemic Changes in sexual positions have also impeded this process.

“Unlike Hong Kong and Singapore, where direct cash payment schemes have supported household spending to some extent, China’s COVID-19 relief package has instead largely focused on supporting businesses affected by the lockdown,” she said .

Policymakers pledged to boost demand, especially consumption, this year.

But spending as other major economies lose steam as interest rates surge aimed at curbing inflation is hurting China’s exports, a rare bright spot for the Chinese economy during the pandemic.

An official factory ac activity survey showed that the sub-index for new export orders has been in contraction territory for 20 consecutive months. The figure fell from 46.7 in November to 44.2 in December. 50 dot markers distinguish contraction from growth by month.

Figure 5: Exports: A key challenge,

Employment in large-scale manufacturing was also under pressure, according to the survey, possibly due to what analysts said were low production levels and difficulties finding workers amid the virus outbreak.

Economists expect the world’s second-largest economy to recover from the second quarter, buoyed by strong consumption and increased state spending on infrastructure projects. But the recovery of the country’s struggling housing market may take longer.

(Drawings by Kripa Jayaram, Riddhima Talwani and Sumanta Sen; Reporting by Ellen Zhang and Kevin Yao; Editing by Kim Coghill)



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