The Strategist

Goldman: China may abandon coronavirus restrictions early

11/28/2022 - 09:19

Goldman Sachs Group predicts that Chinese authorities may suspend its zero-tolerance coronavirus stance by April, which is earlier than originally anticipated. China may take this action due to protests that started throughout the nation when coronavirus limitations were once again tightened.

There is a 30% probability, according to Goldman Sachs analyst Hui Shan, that China would remove all limitations before the second quarter of 2023. The bank is 60% certain that the measures would most likely be lifted in the second quarter. The analyst anticipates that soon, "the government may have to decide between tightening regulations and experiencing additional COVID epidemics."

There is growing pressure on PRC authorities, according to other experts, including those at Commerzbank AG, because of the restrictions. Larry Hu, head of PRC economics at Macquarie Group, "local officials likely to overreact with the current zero-tolerance policy without clear guidance from the top."

The chief China expert at Hang Seng Bank, Dan Wang, is of the opinion that a rapid easing of restrictions is improbable. Otherwise, she claims, there is a chance that COVID-19 will cause a rise in mortality. When it comes to prioritizing opening up of their businesses, many local governments may find themselves in a very unpleasant situation as a result, she said.