China economic focus May 2022: a downside scenario
Under the ‘dynamic clearing’ policy, new Covid-19 outbreaks in H2 2022 and 2023 could further depress the Chinese economy. In May’s China Economic Focus, we outline our downside scenario which shows prolonged, or new lockdowns could slow economic growth to 4% in 2022. In the downside scenario, consumption and industrial production could face a slower recovery compared to post-lockdown in 2020. Despite the government efforts to stimulate infrastructure and property, consumer confidence and supply chain disruption may limit its effectiveness.