As China emerges from COVID-19 lockdowns, the economic recovery will be slower than many expect. Supply-side normalization is outpacing demand recovery, creating new challenges.
Supply vs. Demand
While factories have reopened and production is resuming, demand remains weak due to:
- Cautious consumer spending amid job uncertainty
- Weak external demand as global economy contracts
- Business reluctance to invest
- Disrupted supply chains affecting orders
Recovery Shape
Rather than a V-shaped recovery, China is more likely to see a gradual, uneven rebound with services lagging manufacturing and consumption lagging investment.