Goldman Sachs: Preparation May Be Starting, But Reopening Still Months Away

Goldman Sachs note that “the latest signals around China’s potential exit from its “dynamic zero-Covid” policy, particularly the People’s Daily article on most long Covid cases being mild, have triggered hopes for China’s reopening and a sharp risk-on market move. Changing official communication to alleviate public fears of the coronavirus is one of the necessary conditions for reopening, as we explained in September, among other medical preparations. However, as confirmed by the November 5 State Council press conference, the government still needs to keep its zero-Covid policy until all preparations are done. This may take a few months, in our view, and we continue to expect Q223 reopening in our baseline.”