Is it time to invest in China?

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Fresh out of a three-year lockdown, is now the time to invest in China? We take a look at the state and long-term potential of this prospective superpower.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

14 July 2023

After the long-awaited lifting of lockdown restrictions in January, the market predicted that the Chinese consumer would spearhead the economic recovery. This was fuelled by a surge of pent-up demand and record levels of household savings accumulated during the lockdown.

But consumers have opted to prioritise saving over spending. In fact, saving rates as a proportion of disposable income are almost three times as high as in the US and five times as high as in the UK.

Meanwhile, as many economies struggled with inflation, weak demand has seen China teetering on the edge of deflation, with year-on-year price changes stagnating in June.

Source: J.P. Morgan, Guide to the Markets, as at 10 July 2023. *UK and US data for June 2023 is