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Don’t write off China’s economic recovery

By Zhang Jun

06 Jul 2023 · 4 min read

informed Summary

  1. The economic rebound that was supposed to be triggered by the ending of China’s COVID restrictions has yet to materialize. This is less surprising than you might think, Zhang Jun argues in PS.

SHANGHAI – The strong growth rebound that was widely expected to follow the end of China’s zero-COVID policy has yet to materialize. This is both less surprising and easier to understand than many observers seem to think.

The end of COVID-19 lockdowns was supposed to unleash a powerful wave of pent-up demand. Instead, aggregate demand, which had been slowing before the pandemic, has returned to its previous trajectory. Though Chinese have been traveling, socializing, and dining out more, consumer-spending growth by households has been limited. Fixed-asset investment has not recovered.

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