A market analyst said on Tuesday that the planned easing of Covid-19 restrictions in Shanghai should help boost the mainland economy in the third quarter of the year, though it’s still too early to say how significant such a rebound would be.

Ben Cavender from the China Market Research Group told RTHK’s Hong Kong Today programme investors are eager to start pumping money back into the stock market, but he’s maintaining a cautious outlook for now, with new figures released on Monday showing both retail sales and industrial production slumping to their weakest growth in two years.

“I think everybody that’s looking at China’s industrial capacity and ability to manufacture is still very worried right now. There isn’t really anything that’s happened yet to unsnarl the major domestic supply chain issues we have, and we have obviously still a big international supply chain issue as well,” he said.

Cavendish – who lives in Shanghai – said many residents are cautiously optimistic that the city will gradually open up following a six-week lockdown to combat a major Covid-19 outbreak in the metropolis. However, he doesn’t think domestic spending would surge immediately.

“Consumers are going to be wanting to spend and living a more normal life, but certainly in the beginning – in the next month or so – they’re still going to be quite conservative and careful about what they do,” he said.

“Nobody really knows even when things open, what that means for future ongoing testing, for the risk of being sent again to a quarantine camp or be blocked in again, and it’s important to remember that there are still 30-something cities around the country that are in some form of lockdown right now.”

Cavendish said for the moment, little has changed in the city so far, with many shops still closed and most people still having to stay at home.