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China's reopening from COVID raises specter of new inflation

Virus fight continues but analysts expect soaring demand for resources

Construction in Shanghai: A recovery in China's slumping property market and other sectors could fuel global inflation.   © Reuters

HONG KONG -- China's gradual emergence from zero-COVID limbo promises to boost its economic growth but poses a double-edged sword, as the reopening of the world's No. 2 economy could fan global inflation that has been showing some signs of easing.

While China has not fully reopened to the rest of the world and continues to grapple with coronavirus outbreaks, it has signaled a desire to reconnect after significantly easing restrictions following large protests. Those rules, enforced for nearly three years, caused massive economic disruptions and reduced demand for oil, gas and raw materials, as China is normally the largest importer of such commodities.

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