China’s Speedy Consumer Revival Boosts Global Growth
During China’s lunar-new-year holiday, tourists flocked to the Taihao mausoleum in Henan province and to the box office to see the new film “Full River Red”.
This is evidence of a consumer revival in the world’s second-biggest economy, which is arriving earlier than expected due to the faster spread of the virus in China.
At least 80% of China’s population is estimated to have caught the disease, and with people catching and recovering from the virus, China’s service economy is returning to life.
An index of activity outside the manufacturing sector jumped from 41.6 in December to 54.4 in January, the second-biggest leap on record.
Bank deposits now exceed ¥120tn ($18tn), which could provide ammunition for a bout of “revenge risk-taking” as households gain confidence to buy bonds and shares that are less safe but potentially more rewarding than a bank deposit.
China’s splurge will make a contribution to global growth, with the country’s economy predicted to grow by 5.2% this year, accounting for two-fifths of the expansion in the world economy.