Credit Suisse with the note.
On Saturday, China’s National Health Commission (NHC) dispelled recent speculation that Covid restrictions would be eased. NHC officials stated that China will “unswervingly” adhere to its current zero-Covid policies as it faces a possible seasonal surge in cases.
The yuan and Chinese equities corrected lower on Monday, but did not fully reverse Friday’s strong rally (Figure 3). The market consensus now seems to agree with our view that the central government is unlikely to officially “pivot” from zero-Covid, given President Xi stated his commitment to the policy at the October Communist Party Congress.
