Chinese Economy set to grow 7.9%

China export container port

In an interesting article dated the end of July, The World Bank released its forecast for the China economy. Apparently it has revised down its estimate of 5.9% growth which it predicted at the start of Covid, around end of December 2019. We think most analysts had already agreed that was never going to happen. Its new figure of 1.6% growth is in line with the IMF guess a few weeks earlier and the last China Economic data for the the first 6 months of 2020. Hardly any surprises there.

However, what is a little surprising is the expectation that China’s economy will grow 7.9% next year – 2021. Despite citing unusually high risks from the uncertainty of the epidemic and economic recovery. This comes on the back of the previously mentioned IMF report that found the US economy is set to contract around 6% for 2020.
Will we see the US pull out of both of those institutions?

The major damage to the US economy was the haemorrhaging of the retail sector as the US economy is heavily dependent on domestic consumption. Whereas in China, the same domestic consumption kept its economy going. Of course, there was a huge amount of luck for China in that it was right at the start of the 2 week Chinese New Year holiday when many businesses, factories, schools etc had already shut down. The flip side of that was it meant it took them too long to get organised costing valuable time.

However, in retrospect, whether or not that would have played a significant part in the current situation is debatable as even after the WHO gave several strong warnings of a pandemic, the world generally also failed to respond in a timely and organised manner.

Two possible reasons for the World Bank and IMF confidence in China’s economic bounce back may be:

1/ E-retail, digital currency, contactless payments via WeChat pay or Alipay are extremely well established and supported by consumers throughout China compared to the US. Data would suggest more people switched from B&M shopping to online during the early days of the virus in China.

2/ China took a test, mask, and social distance approach rather than blanket lockdown. This, coupled with E-com delivery services being classed as essential meant that online shopping was not hobbled and B&M shopping was able to creep slowly back.

Currency Concerns

To complicate matters further, amid investor worries that a US economic recovery might be stalled by the country’s inability to stem the spread of Covid the Dollar posted its biggest monthly decline in 10 years at the end of July 2020. As the dollar fell to a 2 year low of 92.597, the Euro bounded back to a two year high of $1.1905. To put that into comparative percentage terms, July 2020, the dollar has lost 4.9% whereas the Euro has gained 5.8%. That incidentally, is the biggest gain for the Euro in 10 years. You can read a detailed account here.

This metric could play well for the US as exports become more competitive and imports more expensive. Both good stimuli for the US manufacturing and domestic consumption. However, whether these are enough to offset the down side of a weak currency is debatable, especially long term.

This could all be a moot point as some parts of Europe are struggling again with a resurgence of the virus. China is also fighting a Covid comeback with an increase of cases seemingly entering the country via the packaging and containers of imported seafood. However the US economy woes, dollar v/s Euro may have some bearing on the closer cooperation we have seen between China and Europe in the latter part of this year.

You can read the full article re the World banks prediction here

Thanks for reading our China news, marketing, tech and social media article – we hope it was useful, relative, informative, valuable.

No?
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Then perhaps you may like to chat directly and personally with Everlyne?

But please, be aware of local (China) time when calling from overseas. Despite rumours to the contrary, Everlyne is human, not a bot, she do does eat, drink and sleep – sometimes.


Whatever your question re Chinese Business, Marketing Tech or Social Media, she will know the answer, or know someone who does! A brief intro below;

Everlyne-Yu-Uengager

In 2003 Everlyne Yu co-founded WPBeijing Marketing Studio with Englishman Peter Bic, now known as Bic Brands.

She began Uengager, a company focused on customer engagement, as a SaaS MarTech company in 2017.

Hello, Nihao, I’m Everlyne

I love to talk about and help people understand the amazing ways MarTech and SaaS can work to strengthen your business engagement with Chinese consumers.
I know you have questions or want to talk about your brand or business in China so please, drop me a line opposite. If you prefer live chat, call and talk to me live, in person direct.

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Everlyne is also a key note speaker, lecturer and KOL on MarTech in China. She is CEO of Uengager, business development officer for Bicyu.

Everlyne hs been privileged to work with a variety of international organisations, from VW, Cushman Wakefield, Sodexo, Bristol Myers Squibb to local Chinese firms such as Midea, and OK Order.

If you’re looking for guidance, tips, advice on any aspect of starting or growing a business in China or training, coaching your existing China marketing team for excellence, be sure to check out Uengager. Home page and base for Everlyne Yu. Read her short bio – opposite left – or contact her direct – below – for a free, heart to heart chat.

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A selection of Bicyu clients since 2003

CONTACT EVERLYNE

Published by The Bic

Bicyu is a NZ registered, British owned MarTech business based in Beijing providing marketing, tech, education and information services to European, NZ, Australian, UK, African, and Asian firms doing business in China. We work with local ones too. We've been here doing this since 2003. We also incorporate Aim2D and Uengager in our small brand list.

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