China’s strict COVID-19 policies have had catastrophic effects on the economy, with GDP growth reaching only 3% in 2022 due to repeated lockdowns and travel restrictions. However, the authorities have now announced the end of their zero COVID policy, with GDP growth in Q1 of 2023 beating expectations at 4.5%. This has led to a positive response from investors and citizens alike, with sectors such as retail sales and services showing strong growth. Shanghai-based broker Libertex predicts that the recovery could benefit Chinese e-commerce and online services companies, such as Baidu, Tencent, and Alibaba, which have seen stock prices drop by 50%-75% since 2021. The recovery is unlikely to have a significant effect on US and European markets, but those economies most closely integrated with China could benefit from increased trade. As the world recovers from the pandemic, investors can trade CFDs with Libertex, with positions available on a range of assets, including Chinese and US shares, oil, gas, and currencies. However, traders should be aware of the risks and ensure they understand how CFDs work.
