China may end COVID restrictions earlier than expected

Goldman Sachs Group Inc. said China may end its Covid Zero policy before April - earlier than widely expected - with some chance of a "disorderly” exit, amid tighter virus controls that have prompted protests across the country.

The bank forecasts a 30% probability of China reopening before the second quarter of 2023, chief China economist Hui Shan wrote in a note late November 27.

"The central government may soon need to choose between more lockdowns and more Covid outbreaks,” she wrote. Local governments have struggled to "balance quickly” controlling the spread of the virus while obeying recent measures mandating a more targeted approach.

The economy has been roiled by Covid Zero, with increasingly strict controls curbing peoples’ mobility and business activity, undermining economic growth. The curbs have prompted demonstrations in major cities including Shanghai and Beijing over the weekend.

Economists at Commerzbank AG and elsewhere have cited "growing discontent” over Covid Zero as a sign of the pressures facing authorities.

"The current situation highlights the challenge that China faces in maintaining Zero Covid while attempting to implement less stringent measures,” Commerzbank economists wrote in a Monday note.





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