Chinese consumers are fueling recovery at home and abroad


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Total global cases: 139.0 m

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  • Construction of new homes in the United States in March grew at its fastest rate since 2006

  • Businesses in England have declared £ 5bn in pandemic relaunch subsidies did not arrive in time to secure their premises

  • Australia reported his first death from blood clots ‘possibly related’ to AstraZeneca vaccine

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China’s record growth figures in the first quarter of 18.3 percent, announced this morning, is good news for a government that is actively preparing for the 100th anniversary of the founding of the Chinese Communist Party in July.

There is evidence that momentum is slowing – quarter-over-quarter growth was only 0.6% – and the IMF has stressed that the country’s economy will still bear permanent scars from the coronavirus pandemic. Still, the recovery has been much faster than that of its Chinese peers, thanks to its success in containing the coronavirus and a period of intense industrial production, which jumped 24.5% in the quarter. Global trade is booming while household consumption and retail sales are also buoyant.

China’s growing economic power is also helping Western companies, especially in high-end industries, mitigate some of the dire effects of the pandemic.

LVMH, the world’s largest luxury goods company, reported strong Chinese consumer demand for its brands, including Dior and Louis Vuitton, helping to offset the loss felt by the lack of spendthrift Chinese visitors to its stores in Europe as international travel has almost dried up. L’Oreal, the world’s largest cosmetics company, enjoyed a similar increase in sales in China, now its second largest market after the United States. Chinese love of Mercedes-Benz cars also contributed to the first quarter results at Daimler.

With signs of overheating in parts of the Chinese economy, the administration is now turning to monetary policy, but it is unlikely to apply the brakes too hard in the coming months. According to Diana Choyleva of Enodo Economics, “the party will do ‘whatever it takes’ to prevent an economic slowdown or a bad stock market crisis from spoiling the [the] celebrations “.

Mondial economy

Jobs and Expenses in the we both benefit from the optimism of a successful immunization program. New jobless claims fell to their lowest level since the start of the crisis and retail sales grew at their fastest pace in 10 months.

The IMF noted euro area countries was to spend 3% more of GDP over the next year to combat the economic impact of the pandemic. EU rescue fund could help countries like Greece reset their entire economic model, the country’s prime minister said.

With the reopening of British economy, messages for Jobs have returned to levels seen before the first lockdown in 2020. While the data is heavily skewed by the particular circumstances of the pandemic, there are signs that the lockdowns may have helped ameliorate the lingering UK problem of low productivity.

Index line graph, February 2020 = 100, selected categories showing UK online job vacancies reached pre-pandemic levels in April

Business

Morgan stanleyregular Bank of America , Citigroup and other American banks in the release of exceptional results for the first quarter, albeit tarnished by a loss of $ 911 million caused by the collapse of family office company Archegos. American publisher in general Gillian tettreminds the “children of crypto” that the “baby boomers” of the financial world are still alive.

GlaxoSmithKline could face a fight for his future as Elliott management , an activist hedge fund, is targeting the British pharmaceutical company which has so far failed to capture a piece of the glory of the Covid-19 vaccine. The multibillion-pound stake taken by Elliott comes as investors complain about GSK’s leadership and a disappointing drug pipeline.

Rebase stock price line chart showing that GSK stocks have underperformed their peers.

The rise in remote work during the pandemic left businesses vulnerable cyber fraud and monitoring process hard to cope. Read our special report: Risk management in financial institutions.

Markets

The FTSE 100 in the UK has reached its highest levelsince the coronavirus crisis first swept across Europe in February 2020, boosted by strong US and Chinese data. A large part of the index is made up of companies that make the majority of their income abroad and is considered to be very sensitive to the economic outlook.

As vaccinations resume and pessimism about Europe’s future begins to fade, the bond markets begin to suffer. Government bonds are already falling sales pressure : the German 10-year rate (which moves in the opposite direction to prices) goes back to its highest level since the end of February.

Line graph of the 10-year debt gap (in percentage points) showing the gap between US and German bond yields narrowing

“Much like returning British ad regulars, British equity investors may jump in with optimism, but I have a hunch it will rain eventually.” General publisher Claer barrett examines whether investors should accumulate in the UK “Reopening” of trade. The FT Editorial Boardhas warned investors around the world against false dawn and too quickly assuming the pandemic is over.

Have your say

Non-native comments on Virgin Atlantic boss warns of long-term impact on business travel:

I had platinum cards and two gold cards from different carriers four years ago. I haven’t taken a single flight since March. And I am not alone.

Do i miss it? Teleconferencing is suboptimal compared to face-to-face meetings, that’s clear. But on the other hand, not having to deal with airport security, bad food, jet lag, turbulence, bulky pillows, etc. Not to mention being at passport control in Dulles for 3 hours with other human beings (and viruses!) From all over the world. Will I ever go back to the old ways? Certainly not. Am i sad Of course not, my quality of life has improved a lot. Even while confined.

Final thought

Computers can drive our cars, diagnose diseases and beat us at chess, but the key thing that separates them from humans is self-doubt, writes neuroscientist Stephen M Fleming.

© Bratislav Milenkovic

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