What's going on?
China’s making the rest of us feel small: fresh data released on Monday showed the country’s economic activity climbing to new highs in November.
What does this mean?
The data – based on surveys that ask business managers how busy they’ve been compared to the month before – painted a promising picture for the Chinese economy. The country’s manufacturing sector hit its highest activity level in three years, driven by both strong domestic demand and a boost in exports ahead of the Christmas period. Likewise, its services sector – which covers everything from accountancy to hospitality – hit levels not seen since 2012, suggesting life is returning to something resembling – whisper it – normal.
Why should I care?
The bigger picture: Bring on the vaccine.
This data highlights China’s status as the only major economy expected to grow this year. Unlike the US and Europe – where lockdowns are causing even more economic shrinkage – the country has managed to avoid a coronavirus surge now winter’s arrived. And the best could be still to come: some economists reckon the Chinese economy will get another lift when a vaccine becomes widely available, with the US and Europe’s economic recoveries driving demand for its goods. But others argue it might have the opposite effect: anyone with a vaccination might, after all, go straight back to spending their money on restaurants, concerts, and… well, real life.
For markets: Sync or swim.
One investment advisor says investors should think about investing more money in China – and not just because of the country’s role as global economic bright spot. He thinks it’s especially appealing because the worsening US-China trade war might knock the two countries’ economies further out of sync. In other words, Chinese stocks won’t depend as heavily on the West’s performance – and they might just save your portfolio if things go wrong over here.