{"id":20606,"date":"2020-11-15T14:12:21","date_gmt":"2020-11-15T18:12:21","guid":{"rendered":"https:\/\/www.pgmcapital.com\/?p=20606"},"modified":"2020-11-15T14:12:23","modified_gmt":"2020-11-15T18:12:23","slug":"chinese-economy-rebounding-fast-in-q3-2020","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/chinese-economy-rebounding-fast-in-q3-2020\/","title":{"rendered":"Chinese Economy Rebounding Fast in Q3-2020"},"content":{"rendered":"\n

Dear PGM Capital<\/strong> Blog readers,<\/p>\n\n\n\n

On Sunday, October 18, China reported that its economy grew with 4.9% in the third-quarter from a year earlier, having recovered from a record contraction as lockdown measures ended and policymakers stepped up stimulus to combat the shock from the coronavirus crisis.<\/p>\n\n\n\n

INTRODUCTION:<\/h3>\n\n\n\n

The Chinese economy is picking up steam as the country continues to dig its way out of the turmoil caused by the coronavirus pandemic.The world’s second largest economy expanded 4.9% in the July-to-September quarter compared to a year ago as can be seen from below chart, from the National Bureau of Statistic of China.<\/p>\n\n\n\n

Growth for the first three quarters of 2020 is now up 0.7% from a year ago.<\/p>\n\n\n\n

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Based on its latest gross domestic product (GDP) data, China is now leading the charge for a global recovery basis.<\/p>\n\n\n\n

China’s economy continues to grow at rates unimaginable in other Covid-hit countries.<\/p>\n\n\n\n

Draconian lockdown measures to control the virus combined with some government stimulus appeared to have worked well.<\/p>\n\n\n\n

The National Bureau of Statistics (NBS) stated as well, that in the first three quarters the country’s Industrial output increased 6.9% in September on an annual basis.<\/p>\n\n\n\n

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As can be seen from below chart, China recorded robust growth in foreign trade in September, with exports in U.S. dollar terms rising 9.9% from a year earlier, as demand from trading partners recovered strongly after the lift of coronavirus restrictions.\u00a0<\/p>\n\n\n\n

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PGM CAPITAL ANALYSIS & COMMENTS:<\/h3>\n\n\n\n

As much of the world continues to struggle with the virus, China’s recovery has been relatively speedy. <\/p>\n\n\n\n

The country enforced stringent lockdown and population tracking policies intended to contain the virus, and set aside hundreds of billions of dollars for major infrastructure projects to fuel economic growth.<\/p>\n\n\n\n

The positive momentum through the last six months has also helped China’s economy recover all of the output it lost after a historically bad first quarter. <\/p>\n\n\n\n

GDP grew a cumulative 0.7% through the first nine months of 2020, Monday’s data showed.<\/p>\n\n\n\n

China’s trade increased in October:<\/h5>\n\n\n\n

On November 7, the General Administration of Customs (CAC), said in a statement, that the country’s foreign trade expanded 4.6% year-on-year in October, with exports jumping 7.6% year-on-year and imports climbing 0.9% in yuan terms.<\/p>\n\n\n\n

In the first 10 months, China’s foreign trade of goods totaled 25.95 trillion yuan (3.91 trillion U.S. dollars), up 1.1% year-on-year, accelerating from an increase of 0.7% in the first three quarters.<\/p>\n\n\n\n

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General trade, involving longer production chains and better reflecting the country’s manufacturing strength, edged up 2.8% during the 10-month period, taking a larger share of the total trade of goods.<\/p>\n\n\n\n

Mechanical and electrical products, export value reached 8.45 trillion yuan in the first 10 months, up 3.8% year-on-year.<\/p>\n\n\n\n

Textile exports including masks jumped 34.8% year on year during the period.<\/p>\n\n\n\n

As can be seen from YTD chart, the Shanghai Shenzhen CSI 300 Index, – based on the country’s robust economic recovery – has appreciated YTD with 756 points or 18.13%.<\/p>\n\n\n\n

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We expect the upturn in China\u2019s economy to continue in the last 6 weeks of this year, being supported by improved sentiment after the successful containment of Covid-19 and significant fiscal and monetary policy easing.<\/p>\n\n\n\n

The CNY at 24-Month High against the USD:<\/h5>\n\n\n\n

On Monday, November 9, the Chinese currency, the Yuan (CNY), strengthened to hit a new 24-month high, against the USD as can be seen from below chart. <\/p>\n\n\n\n

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The yuan’s rapid rise was in part due to the fact that Biden had been declared US President-elect, as he will likely continue negotiations with China to resolve the ongoing tariffs war, combined with the fact that, the world’s second-largest economy’s steady recovery would translate to a firmer currency.<\/p>\n\n\n\n

Based on the points mentioned in this article, we maintain a BUY rating on Chinese securities, specially those in the financial- and technology sector.<\/p>\n\n\n\n

Disclosure:<\/h4>\n\n\n\n

On the close of the markets on Friday, November 13, Chinese securities counted for 29.4% \u2013 for which they have the highest weight factor \u2013 of the PGM Components 50 Index. Personally, we own shares of Chinese Big caps securities in the financial- as well as the technology sector.<\/p>\n\n\n\n

In this rapidly changing world and subsequent turbulence, PGM Capital is at your service as your Professional, Trustworthy and Dedicated, Financial Advisor and Asset Management.<\/p>\n\n\n\n

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Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line. Past Performance Is Not Indicative Of Future Results.<\/p>\n\n\n\n

Yours sincerely,<\/p>\n\n\n\n

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Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"

Dear PGM Capital Blog readers, On Sunday, October 18, China reported that its economy grew with 4.9% in the third-quarter from a year earlier, having recovered from a record contraction as lockdown measures ended and policymakers stepped up stimulus to combat the shock from the coronavirus crisis. INTRODUCTION: The Chinese economy is picking up steam as the country[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":20631,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-20606","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pgm-capital-blog"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=20606"}],"version-history":[{"count":37,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20606\/revisions"}],"predecessor-version":[{"id":20653,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20606\/revisions\/20653"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media\/20631"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=20606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=20606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=20606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}