A faster-than-expected turnaround

We had expected disruption from China’s reopening wave of COVID infections to weigh heavily on activity well into Q1. But there is mounting evidence that much of China’s population has already been infected and that disruption is already fading rapidly. Coupled with a wider shift toward more pro-growth policies, this points to a reopening rebound starting this quarter and a stronger 2023 as a whole. We now expect China to grow by 5.5% this year. This will mostly reflect a one-off cyclical bounce, however, and we remain relatively downbeat on China’s medium-term prospects.