News analysis

Market exuberance over China’s Covid-19 pivot needs to be balanced with caution

People at a Christmas market in Shanghai on Dec 24, 2022. PHOTO: REUTERS
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SINGAPORE – China’s move away from its zero-Covid policy has sparked predictable excitement among Wall Street financial firms looking for new opportunities amid a global slowdown, but the hoped-for boom may be some way off.

The consensus view is that a burst in domestic consumption will power growth of as much as 5 per cent in the Chinese economy in 2023 and lead to sizeable gains in the Shanghai and Shenzhen stock exchanges.

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