Goldman Sachs Global Economics Analyst Chinas Bumpy Reopening Our 2023 China outlook is a story of two halves with slow growth in the first half followed by a more pronounced rebound in the second half as the economy reopens (Exhibit 17). We expect weak growth in Q4 and Q1 as the Zero Covid Policy (ZCP) likely stays in place during the winter. In fact, the recent sharp rise in cases led us to have a significantly below-consensus Q4 estimate of 1.2% annualized. Exhibit 17: Weak Growth Through H1; Rebound in H2 Percent change, China Real GDP Percent change, quarterly annual rate quarterly annual rate 12 12 GS 10 Bloomberg Consensus 10 8 8 6 6 4 4 2 2 0 0 Q4 Q1 Q2 Q3 Q4 2022 2023 Source: Bloomberg, Goldman Sachs Global Investment Research Although the leadership has clearly signaled that it aims to exit ZCP, we do not expect actual reopening to start until April. The basic reason for this is that medical and communication preparations will take time. Less than 70% of the 60+ age group in Mainland China are triple-vaccinated (Exhibit 18), and data from Hong Kong show that the unvaccinated elderly remain at serious risk of severe outcomes. As a result, China will need to significantly ramp up its vaccination pace from the current 100k/day before reopening can safely begin. 16 November 2022 15