In the first quarter, the Chinese economy gained 4.5% compared to the same period in 2022, which marked an apparent acceleration compared to previous quarters. This figure gives investors some peace of mind.
Faced with the challenging year expected in Europe and the United States, China is called to become what it has often been since the beginning of the century: the engine of the world economy.
We must not delude ourselves: the growth rate has nothing to do with that of the past. But it is also true that the size of the Chinese economy has more than doubled in a decade. Therefore, in absolute terms, the impact for the rest of the world of China, whose growth is 5% in 2023, is not fundamentally different from that of China in 2011-2012, with a growth of 10%, even if consumption habits change. As a result, the country remains a crucial player in the global economy, and its share of global GDP continues to increase at the current growth rate.
While the published figure is impressive, some factors should be kept in mind: first, the exporting sector is doing well, the domestic market is struggling to keep up, and this figure was only possible thanks to the substantial increase in retail sales in March (+10.6% year-on-year).
This raises the question of whether the country will be able to maintain the current pace of growth with the large Western markets - and Chinese foreign trade - struggling.
Also, in terms of domestic demand, Chinese households show more appetite for goods than services, as we know in the West. This is important: a night spent at a hotel or a meal at a restaurant has less impact on the global economy than purchasing a good, such as a mobile phone or clothes.
As a result, Chinese growth is expected to become progressively less raw material-intensive and energy-efficient. While recent figures from LVMH, for example, show that luxury is doing well in China, there is little doubt that an investor who wants to gain exposure to the Chinese consumer will need to look more at services to achieve this.
We continue to invest in China across our portfolio.