Nothing to say: China is back and promises to drive the global recovery, more and better than the US locomotive, packed with the fight against inflation, under the threat of a possible recession. That's what you get from reading them IMF forecasts: if the world will continue to grow in 2023, the credit will go to China +5%, preceded only byIndia (+5,9%). Europe, in the best of cases, will show telephone area code percentages in line with the USA.
China and growth: the big managers are on the move
The big money managers were the first to smell the climate. It is no coincidence that the month of March closed with net foreign investment on Chinese stock exchanges for 35,4 billion yuan, up sharply from 9,2 billion yuan in February, bringing the first-quarter total to a record high of 186 billion yuan ($27 billion). Since the beginning of the year theCSI 300 index it rose by 5,4%, first squeezed by the last steps of the anti-pandemic policy, then by the winds of war on Taiwan. But geopolitical threats have not prevented the double-digit jump in theexports (+14%) which during the week brought to the fore the strength of Chinese industry, which remains the true factory of the world despite the anti-global winds. Of course, in part the recovery may be linked to the rebuilding of stocks as well as the decision to drug the economy with a shower of aid. But the list of exported goods testifies to one strong growth of solar panels, essential to support the environmental policies of the West, which has culpably allowed China to practically conquer the monopoly of the market. And the same threatens to happen on the front of electric cars. Starting with Chinese supremacy on the front of car's battery performance lithium as well as on that of the availability of Rare lands, the true Achilles' heel of western four-wheel groups.
China: sodium batteries arrive at the Shanghai Motor Show. A revolution?
Indeed, next week, at the Shanghai show, the battery giant catl promises to present another revolutionary novelty: the sodium battery, which promises to store at least double the energy of a much more expensive lithium battery. The bulkier new product will have little impact on the electric car market, but promises to revolutionize the entire geography of storage of wind and solar energy. It will be much easier and more convenient to store the volts obtained from the sun and the wind and then enter them at the desired moment in the network. A Chinese record gained in the large laboratories of Changsha, where the research centers of the German chemical company are also located BASF which this week announced new ones investments for 11 billion euros in the People's Republic, now a center of development in the future of mobility unique in the world, as evidenced by the recent agreements with Elon Musk's Tesla. The long march ofChinese electric car, launched at the beginning of the millennium when the party decided to aim from scratch for an "easier" technology, in the belief that it would have been impossible to chase the Germans and Japanese in combustion engines, has allowed a great leap in quality made possible by development imposed by the government in the face of the market.
China: chip embargo weighs on defense, but….
Of course, the Western embargo on the most advanced chips, necessary to develop the war machine as well as quantum computing, weighs on Chinese development. But leadership in batteries is just as important for the ecological transition, the key with which to interpret the forced approach of the Chinese republic to the gas and oil vaults of the Middle East. Is Use is China moreover, they risk paying a high price on the altar of competition for absolute leadership: the fragmentation of global trade due to the clash between the two superpowers could cost 7% of global GDP in the long run, according to the Fund.
….the relaunch of the Dragon affects key sectors, luxury in the lead
For now, however, there has been a convergence of interests between sectors interested in relaunching the Dragon (first of all the luxury industry), the Beijing government, intent on relaunching the country's economy after the heavy slowdown due to Covid , and international investors who increasingly focus on China to geographically diversify their investments with respect to the USA and Europe, where the risks of recession and banking crises are rising as a result of the soaring interest rates.
Goldman Sachs expects a 24% rise in the Chinese stock market
Goldman Sachs, in particular, expects the Chinese stock market to hit a 2023 rise of 24% thanks to strong recovery of the national economyle after the restrictions of the zero-Covid policy. Kinger Lau, the New York bank's Chief China equity strategist, recently wrote that the latest data on industrial activity and consumption levels show "clear signs of normalization of activity, albeit from very low levels". For Goldman Sachs the Chinese GDP it will grow this year by 5,5% with peaks of 9% and 7% in the second and third quarters. The boost to growth, according to the bank's report, will come from strongly depressed domestic consumption in the years of the pandemic. Overall, Chinese households have accumulated excess savings of more than 3.000 billion yuan, equal to 437 billion dollars.
Also for Carmignac, a French asset management company, after two difficult years, 2023 is the year of recovery, a promising year for investors in China. Out of five risk factors weighing on Chinese equities in 2021 and 2022 (stringent regulatory checks, real estate crisis, zero-Covid policy, local politics, Sino-US tensions), four have largely resolved now that Beijing has end the regulatory crackdown by also deciding to support the private sector, including i internet giants and real estate builders.
Tensions remain between the two big countries, the USA and China, growing strongly despite the solid ties between the two economies which give hope for a peaceful evolution of the tensions affecting Italy too, which will soon have to decide the fate of participation in the Via della Seta, imprudently fed at the time of the yellow-green government.
In the meantime, the idea of betting a chip on a market with a capitalization of over 19 trillion dollars, with a price/earnings ratio of 11 times, lower than the global market average (around 15). Also because, Carmignac argues, most Chinese companies have cut costs in the last three years, so the growth in turnover should turn into a profit increase 2023.
