Asia Gain Benefit As China’s Strong Rebound From The Coronavirus Pandemic
Source: CNBC, Reuters, MOPA
Oct.16.2020
“China’s economic recovery will lift surrounding Asian economies to a certain extent,” Chao, global market strategist for the Asia Pacific at the firm, told CNBC’s “Street Signs Asia” on Monday.
In particular, the focus is on “whether the Chinese consumer can quickly return back to normalized activity,” Chao said. “I think that the Chinese will have much more impact … on boosting other Asian economies.”
The risk-off mood contrasted with earlier resilience for Asian markets. They recovered losses after Chinese data showed exports rising 9.9% in September and imports swinging to a 13.2% gain versus a 2.1% drop in August. The recent data showed that China has 637 million traveling visits during the National Holidays 2020, additionally, the 150 tourist places in Shanghai served 0.95 million visits, which is a nice growth compared with 2019.
Chao, the strategist added, however, that the extent of recovery this time around is unlikely to be on par with 2010 when China’s fiscal stimulus “grabbed other Asian economies by the bootstraps.”
Chao’s comments came after recent data showed China’s manufacturing activity expanded in September, pointing to a continued recovery for the world’s second-largest economy. In August, the country reported its first positive retail sales report for the year so far, though online sales growth for consumer goods and services in that month slowed.
Chao said his firm has observed “record numbers” in restaurant bookings as well as Chinese households traveling during the ongoing Golden Week holidays.
“I continue to expect Chinese equities to outperform developed market equities because China has been showing a continued V-shaped rebound, you know, from coronavirus,” he said.
