What Happened: China is now the most important destination for goods. Globally, the share of exports shipped to China from all economies ( developed and emerging) rose to over 11 percent over the three months ending in June of 2020. According to data from the International Monetary Fund, EU and US exports to China remained largely stable, yet the overall figure is now at its highest level since the 1980s.
The Jing Take: This report is further proof that much of the world’s recovery from COVID-19 is currently dependent on China’s surging economy, from its rapid domestic recovery to its ability to prop up demand for the rest of the world’s trade. The Financial Times reports that countries from Japan and Australia to Europe and the US are now receiving help from the Mainland. Indeed, EU and US exports (particularly commodities like pork, raw materials, and medicine) to China remained solid over the first eight months of the year, as compared with 2019.
China has long been considered a shock absorber for the rest of the world, having stepped into the breach after the 2008 global crash. But no one economy can take on this role indefinitely. Yet here we are, and China is doing the heavy lifting again. The EU is facing its worst-ever recession while China had a strong Q3 performance and is expecting further growth in Q4 with a focus on domestic demand and public investment. Earlier this year, Jing Daily asked the question: Can China’s growth continue given that it hinges on the recovery of the rest of the world? Perhaps that question can now be rephrased to say: How much longer can China prop up the rest of the world?
The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.