Covid "Scarring" Looms Over China's Recovery Outlook

China’s economy will rebound next year, but the strength of recovery is uncertain said experts at the 4th Bund Finance Summit, co-hosted by the China Finance 40 Forum (CF40). The impact of Covid-19 “scarring” on household and small business finances, as well as continued lack of confidence in the real estate sector were unknown factors impacting next year's growth outlook. Experts said the yuan may face depreciation pressure next year due to a risk of dollar shortages, widening Sino-US interest rate differentials, and service trade deficit expansion. As the economy is in the early stage of bottoming out, fiscal policy should be more vigorous, and monetary policy should be more accommodative to support the recovery.