<p style=““ class=“text-align-justify“>Starting from 8 January next year, China will reopen its borders and lift quarantine measures as they are set to label Covid as a disease that only requires „necessary treatment and measures to curb the spread“. That will officially put an end to their zero-Covid policy – which has been in place for roughly three years already now.</p><p style=““ class=“text-align-justify“>It’s a change in the times and how things progress will have significant implications globally. For now, the spread of infections will still somewhat limit China’s „openness“ but give it a few months, and we’re likely to see normalcy resume.</p><p style=““ class=“text-align-justify“>The biggest impact will likely come from the lifting of border restrictions, which is likely to see consumption activity increase drastically. We already saw how travel-deprived the rest of the world has been and upon the slow reopening over the past year-and-a-half, tourism has not died down whatsoever.</p><p style=““ class=“text-align-justify“>Now, China travellers will be the ones having to play catch up and that pent-up demand will also show up in other parts of the world.</p><p style=““ class=“text-align-justify“>It’s a boon for the global economy but it could also result in inflation pressures keeping that little bit higher, depending on how consumption activity rolls out in the months ahead.</p><p style=““ class=“text-align-justify“>The easing of supply disruptions has also been a welcome development and with China’s approach moving forward, we are not likely to see any major hiccups to supply chains and shipping as well – barring another major outbreak in key cities.</p><p style=““ class=“text-align-justify“>For markets, the most significant thing to watch out for is how does all this impact the inflation outlook for next year. It could be a subtle driver, but China demand could very well just add that little twist on how things are going to look like in 2023.</p>
This article was written by Justin Low at www.forexlive.com.