Ahhhhh…
You’ve got to love the global economy.
It’s so interwoven and intertwined…
What happens 7,000 miles away affects what is going on here at home.
After elongating its COVID lockdowns – it seems that China is now ready to pull itself out of its economic cocoon and fly once again.
On the surface – these seems to be a good thing…
For China… for the US… for the world…
But is it?
Is China’s retail comeback all that it seems to be or are there some underlying problems that threaten to derail this train?
Because despite what you may read in the papers or hear on TV…
It’s not all sunshine and roses.
That said…
There is a LOT of that sunshine sentiment going around.
Is it true?
Let’s take a look…
Yes…
In a delightful turn of events that could put a smile on the face of even the most cynical economist – it seems like China’s retail therapy has finally paid off.
All it took was a dip in property prices to loosen those purse strings – something we’ll get to in a moment…
But yes, October saw Chinese shoppers throwing caution (and their cash) to the wind – with retail sales jumping over 7% compared to the same time last year.
And if you remember anything of those previous numbers – things were a bit on the sad side – especially after the government decided to skip its Golden Week holiday… which is like cancelling Christmas in the west.
So, it seems China’s confidence is returning…
But what does this retail renaissance really mean?
Well, for starters, it suggests that when prices fall – even the most penny-pinching consumers can’t resist a good sale.
It’s like the entire country collectively decided, “Hey, if our houses aren’t worth as much – might as well spend on something else!”
And spend they did – in sectors from mining to manufacturing – leading to a 4.6% increase in industrial production.
Not too shabby – but let’s not start the victory parade just yet.
On the less rosy side of things – investment in fixed assets, you know, the important stuff businesses actually use – didn’t quite hit the mark.
It seems the property sector’s lack of allure is pulling down more than just home prices.
In response, China’s central bank is acting like your dad preparing the Thanksgiving turkey…
But instead of basting it with butter – it’s injecting more cash into the banking system than we’ve seen since 2016.
Because if there’s one thing that can fix an economy – it’s more money, right?
That said – not all problems are created equal.
The Chinese real estate sector – with its debt-riddled companies and ghostly empty apartments – looks set to be a thorn in the country’s side for potentially a decade…
But let’s not write off the entire country just yet.
Some sectors are dusting themselves off and might just bounce back within a year.
All eyes are on tech giants Tencent and Alibaba (BABA) – who are about to reveal if they’re part of this comeback story…
Or if there’s more to the story.
Is China a good move for investors?
It may be – but you know who won’t wonder?
Members of GorillaTrades – because they’ll know whether or not there are any profit opportunities when some companies out there trigger the GorillaTrades matrix.
They’ll know because GorillaTrades only puts out recommendations based on data…
Not rumor or instinct – but hard numbers.
If you want to be there to snatch up any potential winners – you should consider becoming a member today.
We’ve built one of the strongest opportunities in our industry of the fact that we don’t guess on anything…
Either the numbers are there or they’re not.
Or you can continue throwing darts at a board…
The choice is yours.
Either way – keep your eyes on China – as it may be the key to profiting here at home.
“Can you afford to ignore China? It’s like saying you can afford to ignore the internet. I don’t think so.” – Richard Branson