During the last three years of the Covid-19 lockdown and control, the Chinese government has issued nine editions of the prevention and control plan, and introduced twenty optimisation measures. Recently, cities including Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Zhengzhou, and other tier-first cities have put forward new policies about Covid-19 control based on local situations.
After unblocking, the tertiary sector such as catering, tourism, and leisure services will have benefits, but it will still take time for the economy to recover, and the consumption rebound may not be evident soon. But it remains to be seen whether there will be a "Retaliatory Consumption ". During April this year, Shanghai's retail sales of consumer goods declined by 48% compared to the same month last year as a result of the Covid-19 control, and among all sectors, the accommodation and catering sector suffered the most, plunging by 69%, which dragged down the national retail sales of consumer goods by 11%. Until May, national retail sales still decreased by 6.7% year-on-year, showing a continuous downturn. Therefore, it will take some time for consumption and the economy to recover in the early stage of unblocking because businesses and consumers are still waiting to see what happens.
When combined with a further loose monetary policy, consumption may rise, but inflation pressure may increase to some extent, and the situation would not be as severe as in countries like the United States, where inflation exceeds economic growth. In short, unblocking will have a direct stimulating effect on the economy, but it will take time for the general consumption demand of society to be fully released.
On the one hand, with the recovery of various industries, residents' income has also recovered, and their spending power has gradually increased. On the other hand, unblocking will help to unblock transportation obstacles, open up production and supply, and help to increase manufacturing orders. Over time, the economy will gradually get on the right track.