QuickScan: Caution Before Optimism

While some market watchers have turned more optimistic on China’s market and economy, this optimism appears premature. Recent steps by the government to implement more targeted Covid control measures entail risks that seem to be underestimated, and business and consumer sentiment continues to be subdued. Barring any significant easing in Covid measures, any rebound in sentiment and the economy seems unlikely, and the winter ahead looks rather gloomy.