As China moves away from its zero Covid policy, downgrading the infectious disease from Category A to B and probably very shortly to C, local Governments are being relieved of legal obligations to implement restrictive controls and the expectation is that the economy will stabilise and begin to grow strongly again as we move into the Chinese Year of the Rabbit.
The shift away from Zero Covid came as a surprise following weeks of civil protests and it’s widely expected that Covid cases will initially rise as day to day life normalizes.
It is hoped however that the increase in economic activity will alleviate some of the issues in the region caused by the strong Dollar, which has increased Government borrowing costs across SE Asia where country debts are mostly denominated in USD. Coupled with global monetary tightening and increasing commodity prices, any respite will be welcome.
“As China re-opens its economy it is suggested that Hong Kong, Thailand and Singapore will likely see the biggest benefit” reported The Straits Times.
Singapore’s national newspaper goes on to report that Hong Kong could see an estimated 7.6% boost to its GDP as exports and tourism income climb. Thailand’s GDP is projected to get a lift of 2.9% and Singapore is estimated to lift 1.2% with Malaysia at 0.7%.
Businesses globally will welcome China’s shift away from Zero Covid and the re-opening of its economy and we wish them well in their quest to minimize illness.
TCB Group in Singapore are region leaders in LCL sea freight consolidation to and from China and throughout the region, providing weekly departures from Singapore to Chinese and all SE Asia ports.