German "Focus" weekly magazine recently published an article pointing out that in view of the fact that China has almost no new confirmed cases of coronavirus. The economy seems to recover faster than expected, which has attracted close attention from investors. The article gives four reasons.
First, China is in the lead. When the epidemic in Europe and the United States is spreading, China's containment of the epidemic has given the world hope that the crisis can be resolved. This means that China's economy can accelerate again. This is evident from the data. In March, China's manufacturing purchasing managers index rose from 35.7% to 52%. Total domestic consumption is about 85% of pre-crisis levels. Maurer, a strategist at BNP Paribas, said: "In mid-April, the Chinese economy may recover 80% of its supply chain, and capacity utilization and productivity will also be substantially restored." In short, people expect the "U-shaped" Recovery has already occurred.
Second, a market that resists crises. So far, the Chinese stock market has proven that it is more resilient to crisis than the European and American stock markets.
Third, the good mood of professional investors. Recently, some big international investors have bought shares of companies such as Tencent. In general, the interest of big investors in Chinese companies will soon recover. Research institute EPFR Global recently stated that in the second half of March, US $ 7 billion has flowed back to the Chinese market.
Fourth, domestic demand has increased. China today is completely different from a few years ago. China's middle class is growing and people's consumption level is getting higher and higher. In the long run, the world ’s second largest economy with 1.4 billion people is full of potential. In 2019, nearly 60% of China's economic output comes from consumer spending. As the investment experts of Berry Investment said: "China's largest market is China." A McKinsey study showed that in 2017, China sold only 9% of its products abroad, compared with 17% in 2007 . This shows that China has become more independent of global exports. On the contrary, the rest of the world is increasingly dependent on China.
