China expected to relax pandemic restrictions, reopen next spring – Morgan Stanley

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China may relax its pandemic restrictions and reopen the country by resuming international travel in spring 2023, as the country’s income growth decelerated significantly and the youth unemployment rate ballooned sharply under the dynamic zero policy, which contradicted with Chinese President Xi Jinping’s policy goal of “common prosperity”, Morgan Stanley said in a note.

Reopening seems to be one of a few measures left in the policy toolkit due to the spillover effects of the weak export growth and sluggish real estate industry and relaxing epidemic control measures will boost consumption and service spending, the bank said.

The reopening in next spring may driven China’s economy to grow by 5.5% in the second half of next year, it said, adding that the growth for the period from the third quarter this year and the first quarter next year is estimated at about 3%.