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OECD Secretary General Matthias Cormann said on Monday that China’s reopening is “extremely positive” in the global fight against rising inflation.

“We certainly very much welcome the easing of Covid-related restrictions in China,” Corman told CNBC’s Jumanna Berchetche at the World Economic Forum in Davos, Switzerland.

“In the short term, this will present challenges, and we are seeing high infection rates, which will likely have some short-term impact,” he added.

“However, in the medium to long term, this is very positive in terms of ensuring that supply chains operate more effectively and efficiently, ensuring that demand in China and indeed trade in general resumes in a more positive pattern. “

China abruptly lifted most of its Covid controls in early December, leading to a spike in infections among its population of 1.4 billion.

Beijing reported on Saturday that almost 60,000 people with Covid have died in hospital since the country lifted its strict Covid restrictions last month, a sharp increase from previous figures.

China’s reopening, along with a flurry of positive data surprises, have been cited by economists in recent weeks as reasons to upgrade their previously gloomy forecasts.

“One of the drivers of inflation was largely a supply shock related to global supply not being able to keep up with global demand … as quickly as required,” Korman said.

“And so getting China back into the global market in earnest and making supply chains work more efficiently will help reduce inflation. Obviously, this is extremely positive.”



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