How and why China’s economy is raging
What is expected for China? The comment by Antonio Cesarano, Intermonte's chief global strategist
China is showing a marked recovery in the last 3/6 months, judging by some economic indicators such as the dynamics of industrial profits or even SMEs.
During the golden week (the week from 1 to 8 October which celebrates the anniversary of the founding of the People's Republic of China dated 1 October 1949) this year there was a strong internal movement flow of about half a billion people , about 80% more than in the same period in 2019. From the photos reported by Bloomberg, the crowds of domestic tourists along the Great Wall or on the streets of Beijing are evident.
The various indicators show a significant increase in corporate profits and also in the flow of credit to the economy.
An interesting indicator is also the so-called Li Keqiang Index, an indicator created on the basis of the indications of Li Keqiang, the current Chinese premier who, in 2007 was ambassador to the US and explicitly said that Chinese macro data were "man made" and that rather it was it is preferable to use three indicators: bank loans, train traffic, electricity consumption.
In a nutshell, China is experiencing a marked recovery in growth with consumers resuming their spending habits (including spending on tourism and travel) as in the pre-pandemic phase.
From October 26 to 29, the nineteenth congress of the Chinese Communist Party will discuss the fourteenth five-year plan 2021-2025.
A longer term strategy called "2035 vision" will also be discussed in order to implement the so-called dual circulation strategy, ie a double circulation of goods and services, in order to reduce China's dependence on foreign countries and achieve autonomy from both technological and raw materials point of view, launching a mega stock accumulation plan for the main raw materials.
On this point I point out the following article.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/come-e-perche-leconomia-della-cina-trotta/ on Fri, 09 Oct 2020 04:58:47 +0000.