December 7 (Reuters) – China announced on Wednesday the biggest change to its zero-covid-19 policy since the pandemic began three years ago, loosening rules that had curbed the spread of the virus but disrupted its second-largest economy and sparked protests. .
The relaxation of the rules, which include allowing infected people with mild or no symptoms to be isolated at home and stopping testing of people traveling within the country, is the strongest sign yet that Beijing is preparing its 1.4 million people to cope with the disease.
Here’s what people are saying about the latest moves to slow down China’s COVID measures:
CHI LO, INDIVIDUAL MARKETS STRATEGIST, ASIA PACIFIC, BNP PARIBAS ASSET MANAGEMENT, HONG KONG
“Obviously, the consumer sector will benefit a lot, but also the services sector and businesses that involve people and travel, will also benefit a lot.
“Together with public consumption, total consumption could increase GDP growth in 2023 much more than the 4% consensus.”
REDMOND WONG, CHINESE RACKET EXPERT, SAXO MARKET, HONG KONG
“The 10 new steps are low, when the expectations are high. I would say that the reading of the Politburo meeting is very important as it does not mean a policy of “dynamic zero-Covid”.
“Instead, it says that China will try to better coordinate epidemic prevention and control with social and economic development and continue to improve the country’s epidemic control methods.”
HYOMI JIE, PORTFOLIO MANAGER, FIDELITY INTERNATIONAL, SINGAPORE
“While the direction of reopening is clear, it is important to monitor how things will unfold … if the conditions will arise, the impact should be considered in a detailed way.”
GARY NG, ECONOMIC EXPERT, NATIXIS, HONG KONG
“Recent announcements show that China is willing to speed up its reopening due to economic pressures. It is possible to see a cyclical increase in business sentiment from suppressed demand, especially in sectors most affected by covid restrictions.
“It means that China will see a rebound from 3% in 2022 to 5.5% in 2023 in GDP growth, which is a rare market with a rapid expansion next year but with a lower result. However, it does not mean that everything it will be good again. immediately as zero-covid has left a scar on consumer and business confidence, which will take more than 2020 to repair this time.”
FRANK BENZIMRA, HEAD OF ASIA EQUITY, SOCIETE GENERALE, HONG KONG
“MSCI China has rebounded well, prices have increased and may change very slowly. Markets will ask questions about how normal growth will take place.
“If the reopening of China were to start a new global cycle, we would see the US curve go up, and the US Treasury (yield) higher, which is not happening. Let’s not get ahead of ourselves in opening up.”
KEN CHEUNG, ASIAN FX CHIEF STRATEGIST, MIZUHO, HONG KONG
“Recent government policy is in line with market expectations to accelerate the opening of China… but I think restrictions will still be there and there are still a lot of travel restrictions, so I think it’s a long way from a full reopening.
The next place to check will be Chinese New Year; I think markets are looking to relax more so they can go back to their hometowns for Chinese New Year.
MITUL KOTECHA, HEAD OF EVENT BUSINESS PLANNING, TD SECURITIES, SINGAPORE
“These are important steps, and the truth is that the current policy has become very difficult to manage as the COVID is more prevalent in the country.
“But some of this is already in the price. Now it will wait and see (and) how it is done. The bottom line is still one of ongoing pressure, as the outlook improves somehow.”
ZHIWEI ZHANG, PRINCIPAL ASSET MANAGEMENT, HONG KONG
“This policy change is a huge step forward.
“The new policy pushes China’s reopening process ahead of the market’s expectations. In line with the message from the Politburo meeting today: to increase market confidence. I expect that China will fully reopen its border outside of 2023 in the middle.
“The need for quarantine for international travelers may soon be reduced. The key issue in the next few months is to keep hospitals running and get the vaccination rate of the elderly up to speed.”
SAKTIANDI SUPAAT, HEAD OF RESEARCH & FX STRATEGY, MAYBANK, SINGAPORE
“I think the markets, in a way, have priced in this (further improvement).
“I think the markets are probably expecting more about the opening of the economy … and maybe they are still worried about the policy turn if they don’t … see the infection going away, and whether the authorities will be able to control the outbreak.”
NAKA MATSUZAWA, CHIEF JAPAN MACRO EXPERT, NOMURA, TOKYO
“This is more of a noise than a game changer. I mean, it’s better for China to lift its COVID restrictions but even if it boosts the Chinese economy and commodity prices, that will work badly for the Fed to break because it tightens financial conditions. .”
“The most important thing (for investors around the world) is the Fed’s pause, and even if the markets are starting to see the slowdown as bad news instead of good news, then the Chinese slowdown doesn’t change that.”
Reporting by Tom Westbrook and Rae Wee in Singapore, Xie Yu and Selena Li in Hong Kong, Kevin Buckland in Tokyo, Scott Murdoch in Sydney; Compiled and edited by Sumeet Chatterjee and Shri Navaratnam
Our standards: The Thomson Reuters Trust Principles.