Dr. Jianguang Shen: China Is Experiencing a V-Shaped Consumption Recovery

Dr. Jianguang Shen: China Is Experiencing a V-Shaped Consumption Recovery

by Vivian Yang

Dr. Jianguang Shen, Chief Economist at JD Digits, spoke at the opening session of the World Economic Forum’s Job Reset Summit on October 20th to share his thoughts on China’s economic recovery and consumption trends under the theme of the “New Economic Context”.

“The [economic] recovery in China has been stronger than expected,” said Dr. Shen during the online discussion. “There is a V-shaped recovery on the consumption. According to JD’s big data, luxury goods consumption, in particular, has achieved over 50% growth [in the recovery period].”

Watch the replay of the opening session here.

As the virus is contained and normal life resumes in China, people have satisfied pent-up travel demand by venturing out during the National Day Golden Week holiday( October 1st to 8th ), and have shown an upsurge of spending desire on consumer goods. Dr. Shen pointed out that higher-income people who can work remotely during the lockdown still have strong spending power, whereas it is the lower-income people who are the most vulnerable, and whose consumption demand has been suppressed.

From a more macro perspective, Dr. Shen said that there are positive signs of China’s economic recovery, evidenced by a 9.9% export growth in September. Consumer electronics and home appliances are among the main categories China exports to the world, as people from many countries are needing these products to work from home during this period. At the same time, production in China has been very strong with a growth rate of almost 7% in September, which is even stronger than the same period last year. Consumption has picked up as well, but is still not as robust as production. But the excessive supplies from domestic production are well absorbed by the rest of the world.

In an exchange about how COVID-19 can promote the development of a green economy and ESG (environment, social and governance) efforts, Dr. Shen expressed confidence that the digital economy will help to drive carbon neutrality in China.

“Internet-based economy and digitalization will become a key driver of China’s growth in the next decade, or even a few decades,” Dr. Shen said. For example, mobile payment will spare the use of credit card materials and a lot of paper, and internet-based telemedicine services will enable more innovative healthcare solutions. “China is leading the utilization of big data and AI technologies, [which will drive the country] to be more efficient in reducing pollution and achieving sustainable growth,” he added.

The Job Reset Summit is a virtual event held by the World Economic Forum from October 20-24. The event has convened visionary leaders from business, international organizations, government, civil society, media and the broader public to shape a new agenda for growth, jobs, skills and equity.

Dr. Shen was joined in a panel consisting of Janet Henry, Global Chief Economist of HSBC Holdings plc; Catherine L. Mann, Managing Director and Global Chief Economist at Citi; Eric Parrado, Chief Economist and General Manager, Research Department at The Inter-American Development Bank; and Guy Johnson, a presenter from Bloomberg LP.

Watch the replay of the opening session here.

 

(vivian.yang@jd.com)

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