Alive And Kicking

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What's going on?

Data out on Wednesday showed that China’s economy is pulsing with strong signs of life.

What does this mean?

China’s recent car sales didn’t quite live up to folks’ visions of a super-powered post-COVID boom – but the country’s receiving some good news at last. Data out on Wednesday showed the economy’s started to thaw, with retail sales up 3.5% in the first two months of the year compared to the same time last year. That’s a welcome return to growth after months of decline, and it’s not the only boon China’s seeing: industrial output also sped up, and the value of new apartment sales is ticking up too. And get this: half of this data deals with January, when a new wave of Covid infections swept China – so it probably doesn’t reflect the true strength of the economy.

Why should I care?

Zooming in: Splash the cash.
Analysts expect this momentum to continue, but the country still needs to overcome some pitfalls. Take unemployment: the government thought the reopening would lead to a pickup in hiring – but with joblessness on the rise, that’s clearly not what’s happening. And that means China’s probably going to need to inject some cash into the system in order to hit growth targets. In fact, it’s already made a start: the central bank poured more money into the financial system on Wednesday than it has at any time since 2020.

The bigger picture: Visit China.
China’s growth goals may not be ambitious, but hitting them will still turn up the dial of global demand – and with the recession-threatened West not pulling its economic weight, that would be a real relief. One area that stands to benefit a lot is tourism in Southeast Asia, as Chinese jet-setters fare forth once again. And as of this week, it’s a two-way street: after three years of national navel-gazing, China’s reopening its borders to foreign tourists.

Originally posted as part of the Finimize daily email.

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