Chinese rebound: what the experts think
● First in, first out
Reports that British officials paid up to £320m of taxpayer money to Chinese state-backed companies to secure medical supplies have “sparked anger from critics”, said Ben Gartside in The Daily Telegraph. They reckon the UK should be distancing itself from a regime that has herded Uighur Muslims into camps and cracked down on free speech in Hong Kong. For China’s critics, it’s also galling that the People’s Republic has become the first big economy to recover from “the disease-induced world slump” – having notched up 4.9% growth, year-on-year, in the third quarter , said Alex Brummer in the Daily Mail. But with the West now looking at “a £21trn shortfall in output”, there is comfort to be drawn from China’s recovery from the depths of recession. “The spillovers for the rest of the world’s economy will be considerable.”
● Chasing the dragon
Adventurous investors are already celebrating, said Mark Atherton in The Times. The Chinese stock market is up by almost 32% since its March lows – good news for British investors who, according to Morningstar, have “poured in” around £3bn – mostly via pension funds. Research group FE fundinfo calculates that China funds have produced an average return of 25.8% this year (compared with 12.8% for US funds and –16.5% for UK funds). And some have performed much better. The Baillie Gifford China fund has returned 44.1%; but leading the pack on 77% is JPMorgan’s China Growth & Income Trust. Its co-manager, Rebecca Jiang, says she has been making hay from hot local consumer stocks – including Meituan-Dianping, the Chinese equivalent of Deliveroo, and the video-sharing platform Bilibili.
● Seeing is believing
Financial analysts have been known to take China’s official growth figures “with a pinch of salt”, said Larry Elliott in The Guardian. Can this strong resurgence really be trusted? On balance, the answer is probably yes, said The Economist. Western analysts offer “slightly different narratives” about the country’s trajectory this year. But they all seem to agree on one important point: that the rebound from the depths of the first quarter has been big. “Crowded streets and buzzing shops do not lie.”