Growth in China will be a key theme in 2023 as the country looks to rebound from the zero-COVID and property market policies that hurt domestic demand.
The return to pragmatism on COVID and property appears to be part of a coordinated effort to restore consumer confidence and jumpstart the economy, Andy Rothman, investment strategist at Matthews Asia, .
Rothman said this is consistent with what Xi said at the Party Congress in October. Xi said he is “focused on promoting high-quality development,” and that he wants to “bring per capita disposable income to new heights.” At the Congress, Xi said “development is our Party’s top priority,” and that “we will provide an enabling environment for private enterprise.”
Premier Li Keqiang also said in a December 9 speech that his government will take measures to promote consumption, which he called “the main driving force of economic growth.” Li reiterated support for the property market, and he signaled a lighter regulatory approach towards online platform companies. “The platform economy has promoted consumption and employment,” Li said, adding that the government “supports the healthy and sustainable development of the platform economy.”
The implementation may stray off course during the winter as cases rise and local officials struggle with the new direction. “Consumers may be free from lockdowns, but at least for the coming few months, a wave of COVID cases, although mild, may dampen sentiment and activity,” Rothman said. “The need to vaccinate many millions of older people is also a challenge.”
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