Highlights from New China: Impact of the Chinese Consumer
- China led the world as the first nation to emerge from the COVID-19 recession and was the only major economy to see economic growth in 2020.
- New China is driven by consumption from an expanding and wealthier middle class population.
- The Covid-19 pandemic further accelerated the shift in China’s economy from “Old China” which appears to be slowing down to “New China” which is experiencing resilient and even shown robust growth.
- The Chinese consumer market is expected to account for 40% of global consumption by 2025.
- China’s consumer-driven e-commerce boom is creating investment opportunities among internet companies.
- Mirae Asset’s active and bottom-up investment approach can help investors identify the companies best positioned potentially to succeed in New China.
Investment Considerations — There can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including the potential of loss of principal.
Emerging Markets Risk — The risks of foreign investments are typically greater in less developed countries, which are sometimes referred to as emerging markets. For example, political, legal and economic structures in these country may be changing rapidly, which can cause instability and greater risk of loss. These countries are also more likely to experience higher levels of inflation, deflation or currency devaluation, which could hurt their economies and securities markets. For these and other reasons, investments in emerging markets are often considered speculative. Similarly, investors are also subject to foreign securities risks including, but not limited to, the fact that foreign investments may be subject to different and in some circumstances less stringent regulatory and disclosure standards than U.S. investments.