News

China: Signs of recovery in world’s largest consumer market?

China signs of recoveryChinese consumers offer a glimmer of hope as the economic fallout from the coronavirus pandemic continues, according to Fidelity International. Life is slowly starting to go back to normal in the country where the pandemic first started, with more than half of the restaurants and 80% of retail stores reopening. As people resume public activity, “their outing signals the beginning of a recovery in the world’s biggest consumer market,” wrote Ned Salter, head of global research for equities at Fidelity International. He added: “Consumption of staples is clearly outshining discretionary or luxury goods in what is still very much a lukewarm and uneven recovery. Broader economic uncertainties are still prompting people to delay big-ticket spending: instant noodles and frozen foods are selling fast, while travel agencies and hotels still struggle to find customers.” The pandemic is unprecedented in recent times and new behaviours have emerged. According to Salter, the resumption of consumer spending is uneven and unlikely to follow past patterns. While the majority of retail stores (80%) have reopened, average daily sales have dropped 40% average compared to March 2019. “Footfall remains weak at high-end outlets, but luxury goods may find a silver lining in demand from people who cancel their overseas shopping trips,” said Salter. “Those who used to fly to Europe for designer handbags are staying in Beijing and Shanghai to minimise travel-related health risks. China cut a luxury consumption tax last year, adding to their incentives for local spending.” Supermarket chains have seen increased business as a result of the coronavirus pandemic, but online grocery stores have performed even better. Hotels, meanwhile, have borne the brunt of the consequences from Covid-19. “Not surprisingly, the outbreak has dealt a heavy blow to hotel operators, as people minimise travel throughout the first quarter,” said Salter. “The occupancy rates of many Chinese hotels have slumped to single digits, similar to situations in Japan and Korea.” © 2020 funds global asia

Sponsored Profiles

Sponsored feature: Asset allocators – How do you track your decisions?

Apr 06, 2020

Mark Barry, Head of Asset Allocation at Milestone Group, explores how a simple question can highlight opportunities to automate and streamline your asset allocation investment process.

Sponsored feature: How is DLT changing the global securities services landscape?

Oct 17, 2019

By Jeslyn Tan, global head of product management, securities services, at Deutsche Bank

Sponsored feature: A new base for fund distribution

Oct 16, 2019

To get the most value out of the digitisation of investment fund distribution, a blockchain-based infrastructure is fundamental. By Olivier Portenseigne, Managing Director and Chief Commercial Officer, Fundsquare.

Sponsored profile: Bridging the gap

Mar 11, 2019

Private equity is a core part of the business for Caceis’ Hong Kong office, which looks after clients in China and Europe. David Li, chief executive officer, explains why private equity enjoys strong client demand and how it is being used to fund China’s international infrastructure ambitions.

Executive Interviews

Executive interview: Understanding geographies

Apr 06, 2020

Margaret Harwood-Jones, co-head financing and securities services at Standard Chartered, shares her insights on platform standardisation, opportunities in Asia and regulatory change to encourage...

Executive interview: ‘Bull markets don’t die of old age’

Dec 12, 2019

Having a balanced portfolio in the midst of the longest expansion in history is an investment imperative, Chris Alderson, co-head of global equity and head of international equity at T Rowe Price...

Roundtables

Hong Kong roundtable: A ‘fragile Goldilocks situation’

Apr 06, 2020

With the global economy at a crossroads, our panel of experts share their thoughts on the market conditions, geopolitical volatility and growth opportunities. Chaired by Romil Patel in Hong Kong.

Singapore roundtable: A horizon to hold long-term assets

Dec 12, 2019

Panellists discuss the geopolitical fractures concerning asset owners, Singapore as a hub for fintech start-ups and why it makes sense to raise capital from a Variable Capital Company (VCC). Chaired by Romil Patel in Singapore.