While many were skeptical about the benefit to China’s economy of loosening its zero-COVID protocols and reopening its economy, signs are now being seen that the reopening is having a substantial positive impact on the Chinese economy, especially the services sector, says Kristina Hooper, Invesco chief global market strategist. The concern three months ago when the restrictions were loosened were that this could unleash an enormous wave of COVID infections. However, China has a high percentage of fully vaccinated people – far higher than other countries that had successfully reopened. Since demand increased quickly after Western developed countries reopened following the pandemic and given that China’s zero-COVID policy lasted far longer than these countries’ stringent conditions, “I assumed there would be a much higher level of pent-up demand, which could provide a large boost to the services sector. Today, we’re starting to see the evidence.”
- PWC