Almost half a billion people are going on holiday, says Bloomberg News. China’s October Golden Week saw 425 million people travelling during the first four days alone, according to official figures. That is almost 80% of last year’s level. China has gone six weeks without a reported Covid-19 case and the holiday is a key test of what life will look like beyond the pandemic.
China’s economy could do with a boost from consumers, Françoise Huang of Euler Hermes told the Nikkei Asian Review. Its strong recovery in the second and third quarters has been led by construction and infrastructure, with consumption “somewhat sluggish”. The OECD forecasts that China will grow 1.8% for 2020 as a whole, the only G-20 nation to expand this year.
Economists polled by Nikkei agreed that if Trump is re-elected then US-China trade ties will worsen, but were divided on the likely impact of a Biden presidency. Some argue that Biden would cut tariffs and ease sanctions on Chinese technology firms, while others point to a growing bipartisan consensus in Washington that favours a tougher line on China.
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China’s strong economic recovery has propelled local stockmarkets higher, notes Chong Koh Ping in The Wall Street Journal. The CSI 300 index is up 12% for the year-to-date, comfortably surpassing the S&P 500’s 3.6% gain. Shares in consumer-facing businesses such as tourism, beverages and carmakers have rallied as the pandemic has been brought under control.
Investors scared of the turbulence of the US election are betting that Chinese onshore markets will prove “somewhat insulated” from broader geopolitics in the coming months. China’s yuan rose by 4% against the dollar in the third quarter of 2020, its best quarter since 2008, as foreign money poured in. Expect “more gains” to come in local markets.
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