As the global elite descend upon Davos this week, they will have a smattering of optimistic titbits to enliven otherwise awkward conversations about the bleak economic outlook for 2023. For starters, inflation appears to be peaking across the world. In the US it fell to its lowest in more than a year. Across the pond, European natural gas prices have dropped to pre-Ukraine invasion levels. The latest data have made some analysts hopeful that annual global growth will not be as glum as the World Bank’s 1.7 per cent forecast released earlier last week. But uncertainty has not abated — and one wild card question that will loom large over the forum’s deliberations is what China’s surprisingly rapid reopening will mean for the global economy.

After almost three years of self-isolation, China — the world’s second-largest economy — finally reopened its borders on January 8. It has now lifted the bulk of its stringent pandemic restrictions. Few expected president Xi Jinping to capitulate so rapidly on his “zero-Covid” strategy, particularly with so few preparations. Covid-19 has now ripped through the country, with an estimated tens of millions?catching the disease each day at one point.

While sickness has dented Chinese economic activity, there are signs that the disruption is fading fast. Some indicators suggest that peak infections in some cities will soon pass, worker shortages are easing and consumers are spending again. Curbs on property developers have also been lifted, though there is scepticism over a purported easing in tech regulation. Capital Economics, a consultancy, now expects China to report 5.5 per cent growth this year, up from 3 per cent earlier. If China can ride out its grim exit wave, its bounce back could have significant global implications.