China's stock market could react more positively to the easing of local COVID policies. The markets could increase by up to 18% in 2023 once Beijing drops its Zero-COVID restrictions and the country fully reopens after months of COVID-19 restrictions.

China's authorities might not reopen fully until the second quarter of 2023 but analysts expect that the stock markets will react more positively to local policy relaxation than to international reopening. Speculation about Beijing changing its Zero-COVID approach have driven gains in Chinese and Hong Kong stock markets recently.

The Hang Seng Index in Hong Kong gained 13% and Shanghai Composite went up 6.4%. Alibaba and other US-listed Chinese stocks also got a boost from investors' hopes for reopening.

IPOs set to increase.

Built up demand due to heightened market volatility and regulatory concerns over new listings in China could cause an IPO boom in 2023. Proceeds raised by IPOs this year are down compared to 2021 and there are a couple of hundred companies currently waiting to go public on the NASDAQ.

Renewable Energy companies gain investor interest

China is heading a global energy transformation that is driven by technological change and the falling cost of renewable materials. If rapid adoption of new technologies with less intensive energy use increased efficiency and energy productivity continue, the global economy could increase by 40-70% over the next two decades. By 2035, China is predicted to account for 28% of the world’s energy demand.

Analysts suggest that China will be a major source of the energy demand and the cutting-edge technology, implying that it will have a unique opportunity to provide global leadership. China is investing $32 billion in renewable energy overseas, with top-tier Chinese companies increasingly taking the lead in global renewable-energy value chains.

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