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The hidden risks posed by China’s COVID elimination strategy | Ausbiz
While most headlines on China have been dominated by Evergrande’s solvency and energy shortages recently, Oreana Financial Services Isaac Poole thinks there’s a far greater risk that markets have failed to consider when it comes to the outlook for economic growth: the nation’s continued zero-covid strategy. He says attempts to eradicate the virus have already had an impact on household consumption and industrial production, two areas that account for the vast bulk of Chinese economic activity. A seen in China’s Q3 GDP report, Isaac expects this weakness will persist over the remainder of the year. He says whether this becomes entrenched will be determined by how quickly China can reopen next year, something he admits is anything but certain. In the near-term, Isaac expects policymakers will deliver targeted stimulus to shore-up faltering economic activity, suggesting easier access to credit for households and SME businesses are the most likely measures that will be introduced. (Source: Ausbiz) Click here to watch the interview.
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