Aerial view of Shanghai skyline. Top view of deep water port with cargo ship and containers in Shanghai.
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The reopening of China’s economy will give global growth a hand, but it’s not quite a game changer, says Fitch Ratings.

In a new report, the rating agency said that a resurgent China does represent a positive for economic growth in the rest of the world — but that the effect will likely be less than in past years.

Given that China currently accounts for about 20% of global GDP, a stronger performance by its economy generally translates into higher global output too.

“However, the boost to the rest of the world will be more limited than in recent episodes of strong or rapidly accelerating Chinese growth,” Fitch said.

Among other things, it noted that China’s recovery will primarily be driven by increased private consumption, and it’s not expecting any major economic stimulus measures from Chinese authorities.

Absent greater fiscal stimulus, China’s recovery isn’t likely to spill over to increased demand for natural resources to build infrastructure and other construction, it said.

“China’s zero Covid policy had not significantly restricted the global supply of manufactured goods, and stronger Chinese growth will be consumption-led, limiting the transmission to other major economies,” the report noted.

Instead, the biggest beneficiaries may be the economies that are most closely integrated with China’s consumer markets in terms of merchandise trade and tourism, Fitch said.

Additionally, the country’s bounceback likely won’t be as robust as previous episodes, it noted.

Earlier this month, Fitch raised its GDP forecast for China this year from 4.1% to 5.0%, based on its strong rebound after the country abandoned its “zero Covid” policy.

“We do not expect as strong a rebound as in 2021, when Chinese GDP grew by 8.4%, because tighter global monetary policy will weigh on demand for Chinese exports and we do not anticipate aggressive macro-policy easing in China,” it said.