Retail Savings and Investments in China - Coronavirus (COVID-19) Sector Impact

Summary

The coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the globe losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

A similar trend is expected in China, as economic growth in the country dipped in the first quarter of 2020. The decline had an adverse impact on all sectors, including the banking industry. While China was the first country to be impacted by the COVID-19 crisis, it is now on a path to recovery, with businesses restarting their operations and domestic travel resuming.

This report focuses on the impact of the coronavirus outbreak on the Chinese economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts the publisher's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

• The Chinese retail savings and investment market is forecast to grow by just 4.6% in 2020, its worst performance since the global financial crisis.
• The publisher's revised post-COVID-19 forecast reflects the slight revival of the Chinese economy since the lifting of the lockdown measures, as the risk appetite of retail investors has improved. This was also supported by monetary policy measures taken by the government in order to boost investment and economic growth.
• The small bond holdings in the Chinese market are expected to surge, while deposit growth is set to accelerate modestly. On the other hand, uncertainty prevails in both equity and mutual fund holdings, even after experiencing boosts in their performances post-lockdown, as the adverse effects of the still-worsening trade relations with the US have started to reappear.
• Manufacturing wealth, an important source of wealth for the Chinese wealth market, will suffer during the global pandemic and the associated economic disruption. While there have been signs of improvement in the manufacturing sector, it has been affected by poor domestic consumption and fewer export orders.
• Since the lockdown measures were lifted, the retail, fashion, and luxury goods sector registered significant growth in terms of total wealth generated, as the affluent indulged in a shopping spree after spending months indoors. This tendency is likely to rebound the luxury goods market towards positive growth in turnover by the end of the year.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the Chinese retail savings and investments industry.
• Understand the key market trends, challenges, and opportunities in the Chinese retail savings and investments industry.
• Receive a comprehensive insight into the retail liquid asset holdings in China, including deposits, mutual funds, equities, and bonds.