Goldman Sachs Group believes China may end its stringent “zero-COVID” measures sooner than widely predicted. There might be some probability of a “disorderly” exit amid unrest against stricter virus curbs across the nation.
According to a recent Bloomberg report, chief China economist Hui Shan wrote that the New York–based investment bank projects a 30% chance of Beijing reopening before April next year.
Hui wrote, “The central government may soon need to choose between more lockdowns and more Covid outbreaks.”
The outlet noted that the communist regime has issued a new 20-point playbook to relax some of the tightest measures in the country. However, many cities still keep imposing lockdowns in communities to curb surging COVID cases on the way to reaching a new high.
Larry Hu, head of China economics at Macquarie Group, said that the new easing policies are “the source of confusion” for local authorities to balance between controlling the outbreaks from spreading while still enforcing the measures.
Hu wrote in a report, “Without clear guidance from the top, local officials are inclined to play safe by sticking to the existing Zero Covid stance.”
He added, “It upset many people.”
Bloomberg reported that the Chinese regime’s continuous Covid Zero policy, which increasingly impedes people’s movements and business operations, has taken a toll on its economy.
Over the weekend, major cities, including Shanghai and Beijing, witnessed multiple protests against the draconian virus curbs.
Commerzbank AG’s economists and elsewhere have cited “growing discontent” over the zero-tolerance approach as a sign of the challenges that Chinese regulators are encountering.
The economists wrote, “The current situation highlights the challenge that China faces in maintaining Zero Covid while attempting to implement less stringent measures.”
Dan Wang, Chief China Economist at Hang Seng Bank, said that it is “unlikely” for a possible gradual reopening anytime soon due to the rapid surge in COVID cases.
Moreover, she also thinks a “rapid or a reckless reopening” would not benefit the country’s growth.
Wang further explained that if the communist regime chooses to ease the COVID control measures too soon, it could result in a rising number of deaths, just like the recent case in Beijing.
She commented, “That could result in a very awkward position for a lot of local governments when it comes to the priorities in their industrial reopening.”
Regarding China’s economy, Goldman’s Hui said that the bank forecasts a 3% growth for China’s GDP this year, citing a more severe virus situation. This is slightly under the consensus prediction of 3.3% in a Bloomberg’s economists survey.