Economics: When will China end zero Covid?
China’s leaders don’t see a trade-off between zero Covid and growth.
Even though national output appeared to contract in April, China’s top leaders still think they are protecting the economy from worse by sticking with their “dynamic zero-Covid” policy.
It will likely be several months before they start to relax Covid controls.
85% of seniors could probably be boosted in two months. But cities are ramping up testing to avoid lockdowns, which will divert resources. And re-opening soon may not be politically convenient. So, zero Covid will likely remain in place through November.
Restrictions are likely to weigh more on demand than supply going forward.
Frequent testing and rolling lockdowns will likely weigh on domestic demand. But policymakers are clearing logistical bottlenecks, and factories are starting to re-open. That’s likely to be a disinflationary combination for the global economy.