China | The broad-based economic recovery after lifting "zero Covid"

Summary

China's economic indicators in January-February 2023 have significantly rebounded after the authorities lifted the "zero Covid" restrictions.

Key points

• Key points:
• After the first 2 months of the high infection period after lifting "zero Covid", the economy is anticipated to be back on the right track.
• Policy support is also the key to the ongoing recovery. “Two sessions” not only secured a stable political leadership transformation, but also set up the “around 5%” growth target together with a series of policy stimulus measures.
• The Januray-February economic data outturns indeed confirmed our “broad-based” recovery story.
• On the supply side, the year-on-year growth of industrial production accelerated to 2.4% from 1.3% y/y in the previous month.
• On the demand side, Jan-Feb retail sales ended its multi-year negative growth and bounced back to 3.5% y/y from -1.8% y/y in December 2022 while fixed asset investment also ticketed up from 5.1% ytd y/y in December to 5.5% ytd y/y and housing investment shrank its negative growth as well.

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