Interview
Tracking China’s Economic Recovery
- Consumer staples and construction sectors are projected to lead the recovery, while consumer discretionary sectors are expected to lag at approximately 64 percent of normal levels as of the end of April, though auto, major restaurants, and sportswear segments may already be performing at 70 to 90 percent.
- Demand within the consumer discretionary sector is anticipated to improve by a few percentage points sequentially each week, with appliance sales fluctuating between 60 and 100 percent based on weekly promotions and dealership data potentially leading production figures.
- Air travel and tourism are forecast to remain significantly weak due to government restrictions and consumer avoidance of venues such as box offices and casinos, whereas mid-tier companies are expected to signal shifts in market conditions before top-tier players.
- New infrastructure sectors, including 5G stations, AI, industrial IoT, ultra-high voltage, and intercity metros, are expected to grow over 20 percent this year and 15 percent in 2021, with double-digit growth considered likely to continue for many years to offset near-term economic slowdowns.
- Future productivity gains for the Chinese economy are anticipated from the successful execution of the new infrastructure transition, supported by an aggregated demand tracker intended to provide ongoing indicators for the path forward.