China’s long-awaited lifting of COVID-zero policies in December and reopening to the world earlier this month had an immediate impact, as markets surged on the hope that China was back in business. But not everyone is convinced China’s reopening is good news for the global economy, and it might even exacerbate inflation worldwide.
For three years, China has remained largely isolated from the global economy, with leaders rarely leaving the country and foreign arrivals subject to strict quarantine, vaccination, and testing requirements. Frequent lockdowns in China’s manufacturing hubs and backlogs at port cities crippled supply chains and added to global inflation concerns. But those days may now be over, as city-scale lockdowns are no more and big-spending Chinese tourists are slowly venturing back out into the world.
