Think Positive

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What's going on?

Here are some surprise results investors can really get on board with: China revealed on Monday it grew by a better-than-expected 6.5% last quarter.

What does this mean?

China’s is the only major economy that didn’t shrink last year. In fact, it’s now officially growing faster than it was before coronavirus struck – a boom that’s been fueled by pandemic-driven global demand for both its medical supplies and its work-from-home tech (tweet this). And it’s likely to keep outdoing its competition for a while, with economists expecting its economy to expand at its fastest pace in a decade this year. The country’s still grappling with the fallout of the pandemic just like the rest of us, mind you, so there’s plenty of risk to its growth outlook yet…

Why should I care?

The bigger picture: Mo’ money, no problems. 

Economists reckon China’s rapid recovery will see the country overtake the US as the world’s biggest economy in 2028 – five years sooner than they’d previously estimated. That rapid growth should also transform it into a high-income country by 2023, and make this fast-growing consumer market – which already accounts for a quarter of the world’s middle-class population – even more appealing a prospect for investors to buy into.

For you personally: Equal opportunities.

Chinese shares are doing well too, with the country’s stock market just hitting its highest level in 13 years. But stocks aren’t the only Chinese asset you might want to add to your portfolio this year. See, one of the world’s biggest index providers is set to confirm in March if it’ll add Chinese bonds to one of its major bond indexes – one of the most widely used benchmarks for global government bonds and, in turn, one tracked by passive funds the world over. And if the provider gives the thumbs up, demand for Chinese bonds could jump by as much as $140 billion.


Originally posted as part of the Finimize daily email.

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