FXTM information and reviews
FXTM
93%
IronFX information and reviews
IronFX
92%
Libertex information and reviews
Libertex
91%
FXCC information and reviews
FXCC
90%
Markets.com information and reviews
Markets.com
89%
FxPro information and reviews
FxPro
88%
EUR/USD
1.1730
BTC/USD
43 916.48
GBP/USD
1.3661
USD/JPY
109.4855
USD/CHF
0.9284
USD/CAD
1.2816
EUR/JPY
128.4265

How has China recovered so well from the pandemic?


15 December 2020

It’s become increasingly clear that China’s recovery is on a significantly steadier path. China’s November industrial production posted a 7% growth compared to the same month in 2019, which is its fastest growth since March 2019. Its retail sales expanded by 5% year-on-year in November; its highest figures in 2020 so far. Fixed-asset investments over the first 11 months of 2020 have increased by 2.6% compared to the same period last year.

China leading the world into post-pandemic era


These data sets released today came in line with market expectations, and demonstrate why China is the only major economy expected to post a positive annual GDP for 2020. China’s economic outperformance is clearly illustrated in the Chinese Yuan’s strength. The offshore Yuan is trading around its strongest levels against the US Dollar since June 2018, and is Asia’s second-best performer against the Greenback so far this year. So how has China been able to pull off such a remarkable resurgence?

Health is wealth


First and foremost, it came down to the health response within the Chinese population. What we have learned since this pandemic broke out is that, a country’s ability to constrain the spread of Covid-19 sets the foundation for its economic recovery. The local population’s compliance with some of the strictest lockdown measures in the world have proved crucial to China’s economic successes.

China used stimulus to great effect


The government’s initiatives in helping key sectors that have been adversely affected by the pandemic also helped the broader economy recover at a faster clip. For example, China’s manufacturing and non-manufacturing PMIs have been able to register a reading of 50 or higher every single month this year except in February. A reading of 50 denotes expansionary conditions in the manufacturing sector.

Such resilience has clearly been aided by the fiscal stimulus with amounted to about 11% of China’s GDP. On the monetary policy side, the central bank has already hinted at being able to taper emergency support measures. This is in stark contrast to the central banks at G10 economies that have pledged to remain accommodative, potentially for years to come.

China benefitting from global recovery


China’s external trade figures also show booming conditions for the sector. Its November exports saw their biggest jump since February 2018, having recorded a 21.1% on-year increase. The positive surprise was fuelled by demand for medical equipment, work-from-home devices, and other goods necessary to survive amid the pandemic in other parts of the world. China’s exports have also benefited as its major trading partners slowly emerged from their respective lockdowns going into Q4, while the seasonal year-end pickup in demand also helped propelled its external trade figures.

Asia’s fortunes dependent on China’s recovery


Asian stocks have clearly been buoyed by China’s economic recovery, given the region’s dependence on the world’s second largest economy. The MSCI Asia Pacific index registered a record high this past Friday, and Asian stocks have beaten its counterparts in the developed markets so far in 2020. The MSCI Asia Pacific index has climbed by almost 14 percent on a year-to-date basis, beating the MSCI World index by about 3 percentage points.

However, Asian stocks are cooling off so far this weeki


Hong Kong’s Hang Seng index is now lower by 0.7 at the time of writing, extending its week-to-date losses beyond one percent. The city’s benchmark index has been unable to replicate its performance in late-November when it breached the psychologically-important 27,000 mark. Still, having formed golden crosses of late, whereby its shorter-term moving average has crossed above its longer-term counterparts, such technical episodes typically signals more gains to come. They also confirm the uptrend seen in the Hang Seng index, having posted higher highs and higher lows since its March trough.

Japan’s Nikkei 225 is also flirting with its own 27,000 mark, despite being lower by 0.3 percent on Tuesday. Still, Japan’s benchmark stock index remains around its highest levels since 1991. Overall, as long as the region's economic recovery can take its cues from China, that should create more upside for Asian stocks moving forward.

#source

Related

US Markets lost major support, Asian Indices are melting
US Markets lost major support, Asian Indices are melting

Global markets closed last week on the back foot, and no significant positive factors emerged in Asian trading, increasing the flight to safety. The Hang Seng lost...

20 Sep 2021

US Retail sales and other data has supported Dollar
US Retail sales and other data has supported Dollar

The US Retail sales notably exceeded expectations, adding 0.7% in August vs an expected 0.7% decline. The increase to August last year is an impressive 14.9%...

17 Sep 2021

Geopolitics Fire Up Up and Cryptos Are Booming
Geopolitics Fire Up Up and Cryptos Are Booming

Futures in the United States and Europe are trading lower today as investors are worried about the new security agreement between the U.S., the U.K. and Australia...

16 Sep 2021

UK inflation surges, stocks struggle
UK inflation surges, stocks struggle

European markets flat at the open this morning as UK inflation surged to a record high in August and Chinese economic data was soft. China’s retail sales fell to...

15 Sep 2021

Gold is anxiously waiting for the US inflation data
Gold is anxiously waiting for the US inflation data

Gold, hovering around $1790 since last Thursday, might take an even harder hit. The bears are waiting for a good signal to launch an attack. It is now holding it below significant levels...

14 Sep 2021

Here Is Why Stock Futures Are Trading Lower
Here Is Why Stock Futures Are Trading Lower

Despite a week of doom and gloom in the stock markets, futures in the United States are still trading lower. Since February, the S&P 500 has been on its longest...

13 Sep 2021


Editors' Picks

OctaFX information and reviews
OctaFX
86%
HotForex information and reviews
HotForex
85%
XM information and reviews
XM
80%
FXCM information and reviews
FXCM
79%
Vantage FX information and reviews
Vantage FX
78%
Moneta Markets information and reviews
Moneta Markets
77%

© 2006-2021 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.