China

China is gradually regaining its old growth strength

After the deep corona crash at the beginning of the year, the Chinese economy continued its strong recovery over the summer months. Annual economic growth accelerated from 3.2 to 4.9 percent in the third quarter and is thus not far off its previous growth path. By the second quarter, China had already restored its pre-crisis level of economic output. For the year as a whole, there are now signs of growth of around two percent compared with 2019. This makes China one of the very few countries that will even achieve a positive growth rate this year compared to the previous year, and once again proves to be the global economic locomotive. One positive aspect is that the momentum of the recovery has continued until the very end. Both industrial production and the retail trade were able to accelerate their growth significantly in September. The economic climate has recently brightened…

Avoid extremes

  Gold is one of the big winners of recent developments. Rising debt levels, low interest rates for an incalculable period of time and increasing political uncertainty in many parts of the world have led to a strong increase in interest in gold. At the same time, gold is supposed to make portfolios more resistant to risks that can only be assessed vaguely or not at all from the current perspective – so-called black swans. Besides gold, industrial metals in particular have risen sharply. Of course, the rapid economic recovery in China and the fiscal measures taken in other industrial countries played an important role in this. In addition, a certain scarcity premium is slowly becoming noticeable for many industrial metals. In the medium term, the rapidly advancing digitalization should lead to a noticeably higher demand for metals that are needed in this sector. This goes so far that many…

China is growing again

The Chinese economy returned to a growth path in the past second quarter with great momentum. The gross domestic product increased by more than eleven percent compared to the previous quarter, thus fully offsetting the roughly ten percent slump at the beginning of the year. The pre-crisis level of economic output was restored and growth of 3.2 percent was achieved compared with the second quarter of 2019. That is remarkable. However, the recovery is not balanced. The industry was able to quickly resume production after the comparatively short corona lockdown in February and has now almost returned to normality. With its high share of around 40 percent, it has decisively stabilised the overall economy. Private consumption, on the other hand, continues to stumble, weighed down by people’s fears of job and income losses and of a second wave of infection. For this reason, the state has had to provide decisive…

China: More and more signs of recovery

  In most areas of the Chinese economy, signs of recovery now predominate. Not only do the survey results now signal growth again, but the „hard“ economic indicators have also turned to a recovery path. Industry has returned to its pre-crisis level and has been in the black since April. Even a slight increase in profits has now been reported. The retail sector has at least narrowed the gap to last year, at least noticeably, to which the strong sales of car dealers in recent weeks have contributed in particular. In fact, they were able to completely make up for their 80-percent decline from February. There is thus much to suggest that the figures on economic growth in the second quarter, which China will publish in about two weeks‘ time, will be good. Compared to the previous year, there should be a slight increase again, which would correspond to a…

China’s economy shrinks significantly in the first quarter

As a result of the corona lockdown in February, China has lost about one-tenth of its economic output in the first quarter of this year, representing a 6.8 percent drop in GDP compared to the first quarter of 2019, by far the lowest figure for Chinese economic growth since the country began publishing quarterly growth rates in 1992 and probably the sharpest drop in growth since the turmoil of the Cultural Revolution in the late 1960s. However, the economic data released today also show how China’s economy has progressed since the cautious easing of rigid restrictions in March. According to official data, industry increased production in March by almost a third compared with the previous month, and the year-on-year gap narrowed from over 13 to just over one percent. By contrast, consumption is recovering only very tentatively. Retail sales in March remained deep in the red compared to the previous…

China: Growth forecast 2020 reduced to zero

As the country of origin of the pandemic, China was the first economy to fall into the Corona crisis. The Chinese economy experienced an unprecedented slump, as shown by the February figures from industry and retail, which were in double digits of minus. Since the beginning of March, the Chinese authorities have been relaxing the strict restrictions on public life and the economy is slowly beginning to recover. However, daily data on economic activity show that the road back to normality is very bumpy and will probably take a long time. The stumbling blocks are not only the high security requirements to prevent a new wave of infection. The lockdown, which lasted for weeks, has deeply unsettled consumers. Shops and restaurants are still being avoided. In addition, the global economy is facing an ever deeper recession. Large parts of the Chinese export economy are facing a dramatic drop in demand….

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