You know who #2 is, right?
No, we’re not talking about Robert Wagner in Austin Powers…
Though, I sort of wish we were.
No, we’re talking about the second biggest economy in the world…
China.
After YEARS of a strict ZERO Covid policy…
The government decided it had enough and started reopening the country fully – for both manufacturing and tourism.
Right away – just turning the faucet on turned helped boost their economy enough that people started talking about it…
But here we are – a few months later – and the faucet is starting to turn into a little brook that could soon become a roaring river.
This is GREAT for the global economy…
But bad when America’s economy is showing signs of weakening – especially in the banking industry.
So, how well is China doing?
Let’s take a look…
Again, after YEARS of a veritable FREEZE…
China’s economy is showing signs of thawing – with recent data indicating a strong recovery from the impact of the COVID-19 pandemic.
Recently, new data showed that retail sales in the country increased by 3.5% in the first two months of 2023 compared to the same period last year…
Suggesting that consumer demand is returning to pre-pandemic levels.
China’s economy – the world’s second largest – was hit hard by the COVID-19 pandemic…
With a sharp contraction in economic activity in the early stages of the outbreak.
However, the days of aggressive measures to contain the virus, including strict lockdowns and mass testing – are over.
The recent data on retail sales is particularly encouraging for investors – both foreign and domestic…
As it suggests that Chinese consumers are once again opening their wallets.
This trend is expected to continue as the government continues to roll out stimulus measures – including tax breaks, subsidies, and low-interest loans, to support businesses and consumers.
Additionally, the country’s manufacturing sector has been recovering strongly…
With the Purchasing Managers’ Index (PMI) for the sector rising to 55.7 in February 2023 (its highest level in four years).
But there’s more…
The service sector has also been igniting again – with the PMI for the sector rising to 53.6 in the same month – that’s solid growth, folks.
With all the good news…
Chinese consumers are expected to increase their spending on a wide range of goods and services.
But…
Is China’s resurgence good for America?
Mostly…
As a major trading partner of the United States – an increase in Chinese consumer demand would provide a boost to American businesses that export to China – mostly our agriculture industry.
Also, a strong Chinese economy would contribute to global economic growth…
which would benefit the US economy as a whole.
A rising tide lifts all boats, right?
Now, this resurgence may worry some – especially with the banking issues we’ve seen lately.
This is a complex issue that is not directly related to the performance of the Chinese economy…
However, a strong global economy would help to reduce systemic risks and improve the overall stability of the financial system.
This strengthening of the world economy could indirectly benefit the U.S. banking sector as well.
That said…
China is well-positioned for further growth in 2023 – which means we may start seeing more investment opportunities arise.
Which is why I’m urging you to become a full member of GorillaTrades today…
You don’t want to be sitting on the sideline when a hot profit opportunity is identified by our stock system…
With its market heating up – it could be the best place to keep your money safe.
Or – you can continue to guess and watch small banks fail and worry about whether yours is next.
Regardless, we’re always here to help…
Until next time…
“When written in Chinese, the word ‘crisis’ is composed of two characters. One represents danger and the other represents opportunity.” – John F. Kennedy