Navigation

  • Skip to Content
  • Client Log In
  • Investor relations
  • Subscribe
  • Contact us
  • Careers
  • Language
  • Back
  • MSCI Client Support Site
  • Barra PortfolioManager
  • BarraOne
  • MSCI ESG Manager
  • MSCI ESG Direct
  • Global Index Lens
  • MSCI Real Assets Analytics Portal
  • RiskManager 3
  • CreditManager
  • RiskManager 4
  • Index Monitor
  • MSCI Datscha
  • MSCI Real Capital Analytics
  • Back
  • English
  • Chinese
Navigation

Navigation Menu

  • Our Clients
    • Back
    • Asset Managers
      • Back
      • Asset Managers
      • Featured

        Insights on MSCI One
    • Asset Owners
      • Back
      • Asset Owners
      • Featured

        Institutional Client Designed Indexes (iCDIs)
    • Banks
      • Back
      • Banks
      • Featured

        Total Portfolio Footprinting
    • Corporates
      • Back
      • Corporates
      • Featured

        ESG Trends to Watch
    • Insurance Companies
      • Back
      • Insurance Companies
      • Featured

        Total Portfolio Footprinting
    • Wealth Managers
      • Back
      • Wealth Managers
      • Featured

        Visualizing Investment Data
  • Our Solutions
    • Back
    • Analytics
      • Back
      • Analytics
      • Crowding Solutions
      • FactorLab
      • Fixed Income Analytics
      • Managed Solutions
      • Multi-asset Class Factor Models
      • Portfolio Management
      • Regulatory Solutions
      • Risk Insights
    • Climate Investing
      • Back
      • Climate Investing
      • Biodiversity
      • Climate and Net-Zero Solutions
        • Back
        • Climate and Net-Zero Solutions
        • Featured

          Implied Temperature Rise
      • Climate Indexes
      • Climate Lab Enterprise
      • Featured

        Net-Zero Tracker
      • Real Estate Climate Solutions
    • ESG Investing
      • Back
      • ESG Investing
      • Featured

        Trends 2023
      • ESG Fund Ratings and Climate Search Tool
        • Back
        • ESG Fund Ratings and Climate Search Tool
        • Featured

          ESG and Climate Funds in Focus
      • ESG Indexes
        • Back
        • ESG Indexes
        • Featured

          Role of Capital in the Net-Zero Revolution
      • ESG Ratings
        • Back
        • ESG Ratings
        • Featured

          What is ESG
      • Impact Solutions
        • Back
        • Impact Solutions
        • Featured

          Role of Capital in the Net-Zero Revolution
      • Sustainable Finance Solutions
        • Back
        • Sustainable Finance Solutions
        • Featured

          Role of Capital in the Net-Zero Revolution
    • Factor Investing
      • Back
      • Factor Investing
      • Featured

        MSCI Japan Equity Factor Model
      • Equity Factor Models
      • FaCS
      • Factor Indexes
    • Indexes
      • Back
      • Indexes
      • End of Day Index Data Search
      • Factsheets
      • Index Methodology
      • Index Profiles
      • Index Regulation
      • Index Resources
      • Real-time Index Data Search
      • Thematic Investing
        • Back
        • Thematic Investing
        • Featured

          Thematic Exposure Standard
    • Real Assets
      • Back
      • Real Assets
      • Featured

        2023 Trends to Watch in Real Assets
      • Datscha
      • Enterprise Analytics
      • Global Intel
      • INCANS
      • Private Real Assets Indexes
      • Real Capital Analytics
  • Research & Insights
    • Back
    • Featured

      Trends 2023
    • Research & Insights
      • Back
      • Research & Insights
      • Climate
      • ESG
      • Equities
      • Factor Investing
      • Fixed Income
      • Multi-Asset Class
      • Real Estate
    • Events
      • Back
      • Events
      • Featured

        Capital for Climate Action Conference
      • On Demand
      • Webinars
  • Technology
    • Back
    • Data Explorer
    • Developer Community
    • Technology and Data
  • Who We Are
    • Back
    • About Us
      • Back
      • About Us
      • Featured

        2022 Annual Report
    • Corporate Responsibility
      • Back
      • Corporate Responsibility
      • Enabling Sustainable Investing
      • Environmental Sustainability
      • Governance Practices
      • Social Practices
      • Sustainability Reports and Policies
    • Diversity, Equity and Inclusion
    • Media Room
    • Our Leadership
      • Back
      • Our Leadership
      • Featured

        Henry A. Fernandez
    • Recognition

Main Search

Most visitors searched for:
ACWI Research ESG Factor Investment Insights Gallery Asset Owners
Might interest you:
  • Client Log In
  • Investor relations
  • Subscribe
  • Contact us
  • Careers
  • Language
  • Back
  • MSCI Client Support Site
  • Barra PortfolioManager
  • BarraOne
  • MSCI ESG Manager
  • MSCI ESG Direct
  • Global Index Lens
  • MSCI Real Assets Analytics Portal
  • RiskManager 3
  • CreditManager
  • RiskManager 4
  • Index Monitor
  • MSCI Datscha
  • MSCI Real Capital Analytics
  • Back
  • English
  • Chinese
The Impact of China’s Reopening

Extended Viewer

 

The Impact of China’s Reopening

 

Shuo Xu
January 23, 2023

China reopened its borders and eliminated COVID-19 quarantine requirements on Jan. 8, which appears to be the end of its three-year-long, “zero-COVID” policy. Markets clearly took China’s recent reopening positively: From Oct. 31, 2022 (recent market trough), to Jan. 17, 2023, the MSCI China Index was up 51.7%, contributing to the 18.3% outperformance of the MSCI Emerging Markets Index relative to the MSCI Developed Markets Index. Concurrently, China’s weight in the MSCI Emerging Markets Index rose from 27% to 33%, and the Stock Connect Northbound Channel1 recorded USD 28 billion of inflows as international investors gained confidence in China’s economy.

China’s change to its restrictive policy could also provide significant support to the global economy. The growth rates of developed economies and emerging economies (ex-China) are projected to slow from 2.5% and 3.8%, respectively, in 2022, to 0.5% and 2.7% in 2023. Conversely, China’s growth is projected to significantly advance from 2.7% in 2022, to 4.3% in 2023.2 Within China, the advancement of logistics and mobility signals since Nov. 2022, such as flight numbers, traffic indicators and the shipment of core materials, could suggest an acceleration of activities in key sectors across manufacturing, consumer and services.

 

Uncertainties remain amidst progress

While China’s reopening provides a silver lining to the lack of global economic growth projected for 2023 and beyond, a smooth path towards recovery is by no means guaranteed. For instance, uncertainties around how future COVID-19 waves could impact labor participation and consumer spending persist. China may also need to strike a fine balance by reversing policies in key sectors (real estate tightening and internet platform regulation) and promoting a more sustainable growth model.

Global GDP growth projections

China market reactions

Gross total in USD. Source: MSCI Research, WIND data.


1 The Stock Connect program facilitates trading and clearing between mainland China’s (Shanghai and Shenzhen) and Hong Kong’s securities markets. Northbound Trading enables international investors to trade eligible securities in mainland China through the Hong Kong Exchange.

2 The World Bank, “Sharp, Long-lasting Slowdown to Hit Developing Countries Hard,” Jan. 10, 2023.

Related content

Markets in Focus: Investors Look to Capture Big Market Shifts

The new year starts with the prospect of lower global economic growth, softening inflation and continued monetary tightening.

Explore more

Diversification for Home-Biased China Investors

The U.S. and China represent two of the largest and complementary global-equity markets.

Learn more

The Return Dispersion of China Onshore and Offshore Equities

While the MSCI China Index declined 21.8% in 2022 and underperformed the MSCI EM ex China Index by 3%, the return dispersion within the Chinese equity market was also noticeable.

Read more

msci logo
  • Locations
  • Legal
  • Modern Slavery Statement
  • Privacy notice
  • Index regulation
  • Site map
  • Cookies
  • Use of ISO standards
Subscribe Contact us
© 2023 MSCI Inc. All rights reserved

UtmAnalytics