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Political Infighting and China’s Post-Lockdown Economy

China’s economy should finally start improving as lockdowns and COVID restrictions are being lifted, and authorities are pledging new policy measures to support growth. Data should look better in the coming months, particularly in terms of industrial production. But the conflicting policy messages from top leadership, along with mixed signals from local governments, are likely to take a toll on business investment and consumer spending. The recovery from lockdowns this year will not look like 2020, as Beijing has not formally abandoned its “zero COVID” stance, and communicating a transparent, predictable, and stable policy environment will require time to rebuild policy credibility to both households and corporates.

Posted June 11, 2022
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