While most agree the overall economic growth will recover in China this year, there appears to be a lack of conviction on the magnitude of that rebound.
Many local traders now think this year's household consumption recovery could be slower than expected, given the scarring effects of property deleveraging and the legacy of three years of Covid controls.
Besides consumption and property, regional investors are not overly optimistic as ' key concerns include the risk of Covid reinfections and whether we could see another big wave of infections in the next few months which might weigh on activity growth.
US-China relations remain a popular conversational topic and provide a safe-haven bid for the US dollar in Asia. From a Yuan bellwether perspective, it suggests investors are hedging bets against the Biden administration's anti-China plays accelerating this year.
In comparison, Wall Street still holds a more optimistic view on consumption recovery in China, potentially based on western economies' experiences whereby household consumption boomed after reopening.
But we are at a fork in the road right now regarding whether China will follow a western reopening game plan or a more Asia-styled cautious reopening approach. Remember that the Chinese, unlike the US and other western countries, are fundamentally net savers, not net consumers.