BEIJING: China’s economy is widely expected to rebound by the end of the first quarter as COVID-related disruptions wane, giving a much-needed boost to the ailing global economy, according to international investment banks and asset managers.
A rebound in the world’s second-largest economy will help drive the growth of neighboring economies, strengthen global supply chain stability and provide attractive opportunities for international investors, they said. “The speed of China passing the peak of COVID-19 — at least when it comes to the recent wave of infections — is much faster than we previously expected. This means a significant economic upturn may soon take place,” said Chen Dong, head of Asia macroeconomic research at Pictet Wealth Management.
China’s economic activity may pick up substantially by the end of the first quarter, which will reduce uncertainties related to global supply chains, boost outbound travel and benefit neighboring economies, Chen said.
As some provinces and cities in China have announced that they have passed the peak of the current COVID-19 outbreak, population mobility and economic activity are regaining their momentum, propelling a rally in the Chinese currency and the stock market.
The central parity rate of the renminbi jumped 654 basis points to 6.7611 against the US dollar on Tuesday, reaching its strongest level since mid-August. In addition, the CSI 300 index, which covers the top 300 stocks traded in Shanghai and Shenzhen, rose for the seventh straight trading session as of Tuesday, closing up 0.11 percent at 4,017.47 points. Amid weakening global economic and market prospects and tightening campaigns by a number of nations’ central banks to curb inflation, the pickup in China’s economic fundamentals and its financial markets offers unique opportunities to international institutional investors.
–The Daily Mail-China Daily news exchange item
