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China’s Economic Recovery Isn’t Going So Well


At the end last year, there was much speculation about China’s potential for significant growth. The announcement was made that all restrictions on covid would be gradually lifted. Last month saw the last restriction lifted. Then came a week-long holiday during which migrant workers returned home to see their families.

Now that the factories have all fully restarted, all covid restrictions have been lifted, and China normalizes post covid, the “restart” seems to be somewhat modest. Preliminary data so far suggests that growth isn’t roaring back, despite most covid controls having been lifted for more than two months. Macroeconomic data paints a mixed view.

The rebound:

Part of the effect can be something that was alluded to with the release of China’s Q4 GDP numbers. At the time, the economic performance in the Asian giant beat expectations handly, showing that the economy wasn’t as affected by the covid lockdowns as initially expected. Naturally, this was considered good news.
This also meant that there was less room for rebounding, which created a higher baseline of Chinese growth. These were the reasons why markets bet on China’s strong rebound.

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