In mid-November, China signed an important and symbolic free-trade agreement with 14 countries, including Japan, South Korea, New Zealand and Australia. The deal, which represents 30% of the world’s population, eliminates tariffs and quotas on 65% of goods traded in the Asia-Pacific region. Global economists say the deal is further evidence of Asia’s growing power, particularly considering China’s feuding tariffs with the U.S. throughout the past four years.1
According to data from the International Monetary Fund, in 2019, China represented 40% of global economic growth – more than the global growth contributions of the U.S., Europe and Japan combined. This year, China’s economy has proven quite resilient, particularly when compared to other developed countries in the wake of the global financial crisis, Trump tariffs and even the coronavirus.2
How about you? Has your household proven to be as resilient in the wake of this global crisis as your friends, family and colleagues? If so, what was the key? Perhaps it is because you were able to maintain your level of income. What makes your job or source of income more reliable than others during an economic crisis that has affected so many industries? Consider whether your spending levels as the same as before. Perhaps not the same types of expenses, but has your solid financial status given you confidence to spend without interruption? It’s important to ask these questions because we don’t want our success to be a matter of haphazard good luck.
We should continue to engage in intentional, goal-driven financial planning to keep our household on track and secure. If you have survived the financial effects of the COVID outbreak to date, congratulations. Keep doing what you’re doing. If you’ve slipped a bit, assess your financial weaknesses and devise a plan to shore them up. As always, we are here to help enhance your portfolio, realize investment opportunities and secure your family’s financial future.
In China, the coronavirus is largely under control. Consequently, the economic recovery has been V-shaped, led by strong domestic consumer demand. This trendline demonstrates a direct correlation between “flattening the curve” and economic recovery. Chinese revenues continue to trend upward in auto sales, residential real estate, and even restaurants and bars – although the latter are not fully restored to pre-pandemic levels due to continued caution with large indoor gatherings.3
The obvious lesson here is that containing COVID-19 is the key to any country’s economic recovery. The evidence doesn’t lie solely with China. Other countries that have successfully controlled the spread of the virus, such as Taiwan, South Korea and Lithuania, also experienced lessened economic effects.4
Like every other country in the world, the Chinese economy will not be able to recover completely until a safe and effective vaccine is widely available. However, because it acted quickly and aggressively to contain the virus within its boundaries, the country is expected to continue being a driver of global growth, even being called “the world’s best consumer story in 2021.”5
1 Jill Disis and Laura He. CNN. Nov. 17, 2020. “China signs huge Asia Pacific trade deal with 14 countries.” https://www.cnn.com/2020/11/16/economy/rcep-trade-agreement-intl-hnk/index.html. Accessed Nov. 17, 2020.
2 Andy Rothman. Matthews Asia. July 16, 2020. “China’s Economic resilience.” https://global.matthewsasia.com/resources/docs/global.matthewsasia.com/pdf/Sinology/071620-Sinology.pdf. Accessed Nov. 16, 2020.
3 Andy Rothman. Matthews Asia. Aug. 14, 2020. “Four China Trends.” https://global.matthewsasia.com/resources/docs/global.matthewsasia.com/pdf/Sinology/081420-Sinology.pdf. Accessed Nov. 16, 2020.
4 Joe Hasell. Our World in Data. Sept. 1, 2020. “Which countries have protected both health and the economy in the pandemic?” https://ourworldindata.org/covid-health-economy. Accessed Nov. 16, 2020.
5 Andy Rothman. Matthews Asia. Oct. 19, 2020. “China After COVID.” https://us.matthewsasia.com/perspectives-on-asia/sinology/default.fs. Accessed Nov. 16, 2020.
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