Intermoney | China surpassed its economic growth previous to the health crisis. Specifically it recorded 6.5% per year in Q4’20, when in the same period in 2019 it grew by 6%. Thus guaranteeing China’s rapid recovery, while also highlighting the country’s margin for facing up to any temporary turbulence linked to the resurgence of COVID-19. Furthermore, China would encourage the population to continue working to limit the number of people returning to their places of origin during the New Year celebrations.
Unemployment in China, which rose to 6.2% in February, is down to 5.4% in September – only marginally higher than 5.2% in December 2019. Industrial production increased 6.9% year on year in September – the highest increase since December 2019. This data point has vindicated the strong recovery in Purchasing Managers Indices (PMIs) – which are important, but only show month on month change in activity. Retail sales – an important barometer of consumer wellbeing – have also bounced back and risen by 3.3% year on year in September after being negative between January and July this year.
Fidelity | Over 100 million travellers hit the Chinese roads during the five-day May Day holiday, the first major test for domestic tourism demand since the Covid-19 containment measures began to be lifted. International travel remains out of the question, but clear signs of a gradual recovery in Chinese domestic tourism could give other countries a boost in confidence as they look to the future.
CaixaBank Research | China is responding with economic policy space to deal with the coronavirus. On the one hand, measures will be taken in 1H20 to support the sectors having the greatest difficulties. On the other hand, a significant fiscal stimulus package is expected to provide investment in the 2H20. The set of measures will be beneficial, as they will facilitate a full recovery of China’s economy, although they will also increase the deficit in a country with an already high level of corporate debt (150% of GDP).
Charlie Sunnucks (Jupiter AM) | China has shown that the virus can be contained if stringent government measures are put in place, and while the economic shock is considerable, it is also acute, with the shutdown centered on weeks rather than months. The key question is how long it will take for daily activity to normalize.