OTTAWA/TORONTO: China's rapid reopening is likely to fuel demand for commodities produced in abundance by Canada, potentially helping Canada's economy avoid a recession as long as it does not also force up inflation and spur further interest-rate hikes.
China, the world's second-biggest economy, has lifted many of the most debilitating restrictions after abruptly jettisoning its strict"zero COVID" policy in December. Doug Porter, chief economist at BMO Capital Markets, said that for Canada, China's reopening is more a"clear-cut positive" than it would be for other countries with fewer commodities exports.
"The biggest near-term risk, the thing that could throw things off quickly, would be if the rapid reopening in the economy in China causes global commodity prices, oil prices, to go up," Macklem said.