UBS On-Air: Paul Donovan Daily Audio 'Fear and future spending'

Unsubstantiated rumors of China ending zero-COVID policies excited Asian markets. As elsewhere, fear is the pandemic’s driver of economic damage. In China, fear produced ‘precautionary savings’ as consumers insure against future loss of earnings. This is the reverse of what happened in developed economies, so it would be unwise to assume that reducing COVID restrictions in China will automatically produce the same demand patterns as in developed economies.