Tech boom and domestic consumption drive China's economic recovery

 

 

The Asian giant China is once again a protagonist on the international economic scene. After overcoming the impact of the real estate crisis, the country has managed to redirect its growth towards high value-added sectors and strengthen its domestic market, a factor that, according to analysts, positions it as a technological benchmark and global growth engine.

 

In an interview for the program Fin de Mes on Radio 5 (RNE), Joan Esteve ManasanchEsteve, investment director at Gesinter, analyzed the key factors behind this resurgence. "China is growing at 5,2% and is leading sectors such as electric vehicles, artificial intelligence, and renewable energy," Esteve stated. He emphasized that the country has "knowing how to redirect its efforts towards industries of the future«.

 

The real estate bubble, an obstacle overcome

 

Although the Chinese real estate market has not yet fully recovered from the 2021 bubble, its impact on the global economy has diminished. According to Esteve, "housing prices are hardly falling anymore, but it is unlikely they will recover soon" due to factors such as oversupply and low birth rates. However, the expert highlighted the difference with past crises: "The weight of the real estate sector in China was very similar to what it had in Spain before our bubble, but unlike then, The Chinese government has managed to redirect growth towards strategic sectorsIn his opinion, the country is already "starting to see the light at the end of the tunnel."

 

The commitment to strategic sectors such as artificial intelligence and electric vehicles, as well as the promotion of domestic consumption, are the keys to the growth of the Chinese economy, according to Joan Esteve Manasanch, investment director at Gesinter.

 

Technological leadership as a driver of growth

 

The real driving force behind China's new economic cycle is its resolute commitment to technology. Esteve Manasanch He highlighted the country's leadership in fields such as robotics, artificial intelligence, electric vehicles, and renewable energy. "They are not just investing, they are innovating," he asserted, adding that one can find "technologies that do not yet exist in the West." This long-term strategy, supported by ambitious public policies and fiscal incentives, has allowed China to compete head-to-head with the United States in the race for digital transformation.

 

Domestic consumption and stock market opportunities

 

Another key factor is the transformation of its domestic market. The addition of more than 500 million people to the middle class has fueled a new growth cycle based on demand. "It's as if the entire European Union went from poverty to consumption in just a decade," the director of Gesinter remarked, emphasizing the role of the consumer in this new phase.

 

From a stock market perspective, Esteve highlighted the attractive valuations of the Chinese market. "The Hang Seng is the second most profitable stock exchange globally this year and continues to have significant potential," he stated. He emphasized that Chinese technology companies are trading at "very attractive prices," and that many consumer goods companies are offering Dividend yields of 7 to 8%, no debt, and sales growthIn a context of economic growth above 5%, he concluded that "no other country combines growth, low valuations, and cash generation like China."