OECD Secretary-General Mathias Cormann said on Monday that China’s reopening was “extremely positive” in the global fight against soaring inflation.
“We certainly welcome the easing of Covid-related restrictions in China,” Cormann told CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland.
“In the short term, this will come with challenges and we are seeing increased levels of infection which are likely to have short term impacts,” he added.
“But in the medium to long term, it’s very positive in terms of making sure supply chains work better and more efficiently, making sure that demand in China and in fact trade more generally picks up in a way more positive.”
China abruptly ended most Covid controls in early December, leading to an increase in infections among the population of 1.4 billion.
Beijing reported on Saturday that nearly 60,000 people with Covid have died in hospital since the country dropped its strict Covid restrictions last month, a sharp increase from previous figures.
China’s reopening, alongside a flurry of positive data surprises, has been cited by economists in recent weeks as a reason to update their previously bleak forecasts.
“One of the drivers of inflation was largely the supply shock related to the inability of global supply to keep up with global demand…as quickly as needed,” Cormann said.
“So China’s earnest return to the global market and supply chains working more efficiently will help bring inflation down. Obviously, that’s hugely positive.”
