China’s economy grew 2.3% in 2020, and 6.5%YoY in 4Q20. Fixed asset investment increased 2.9%, industrial production grew 2.8% but retail sales shrank 3.9% in 2020. The contraction in retail sales occurred mostly in 1H20, recovering quickly in 2H20 as consumers started cross-province travels from May. We believe that the economic recovery will continue for China.

When China can achieve a complete recovery is still an open question, even though GDP growth was positive for the year. Some GDP growth came from fiscal and monetary stimulus and without those stimuli, the economy would not have recovered at such a pace since external demand has been very weak.

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