In China, The Post-COVID Boom Has Begun
How is the Chinese economy doing these days? Start by asking Louis Vuitton, whose flagship Beijing boutique boasted record sales in August.
PARIS — Meanwhile, in China… As Europe struggles to sort out what stage of the epidemic it is currently experiencing (Is this a kind of detour of the first wave? The start of the second?), the Middle Kingdom gives the impression that the virus is already history.
To symbolically mark this return to normal life, a mega-techno party was organized last month in Wuhan, where the coronavirus began. And the past few weeks, fashion companies like Dior, Louis Vuitton and Prada have gone back to organizing public events in Shanghai.
Harbingers of the general climate, luxury brands are once again registering strong sales. The largest Louis Vuitton boutique in the Chinese megalopolis even broke sales records in August ($22 million). Chinese citizens are venturing out and consuming. It's clear they trust the authorities who have handled the health crisis. And for companies in this sector, China is undoubtedly the only country in the world, or almost, where real money can be made between now and the end of the year.
The Chinese economy as a whole has picked back up. For Beijing, the first bit of good news is the latest manufacturing sector index, which rose last month at a pace unseen for nearly a decade. Export orders also appear to be coming back for the first time in a long time.
The Chinese economy as a whole has picked back up.
Indeed, the world's second-largest economy has managed a quick overall recovery from the repercussions of the coronavirus crisis. And if we're to believe the official statistics, China seems to be just about the only large country to have avoided recession, as defined by a drop in GDP for two consecutive quarters. After falling 10% in the first quarter, the economy grew 11.5% in the second, even if sectors such as tourism and restaurants continue to struggle.
Globally, the other major economies still look worse for wear. Brazil, Latin America's largest economy, reported a record GDP collapse of 9.7% between April and June, and to date, more than 132,000 people have died there as a result of the virus, according to John Hopkins University. India has taken a huge hit too, the U.S. economy contracted 9.5% in the second quarter, and in Europe, which has also seen double-digit growth losses, the scale of the rebound is still unclear.
No one has to believe the official COVID-19 statistics in China, where fewer than 5,000 people have reportedly died since the start of the epidemic. John Hopkins does not include China in its mortality analysis. There are indications that the real death toll is higher, though how much higher is anyone's guess. What is clear is that the Chinese people feel confident about the measures taken by their central government to curb the virus and react quickly and effectively when new clusters emerge.
The truth about the health situation China won't be cleared up anytime soon, especially since the World Health Organization shares incestuous ties with Beijing, as French investigative journalist Pierre Haski revealed in July on the French network Arte (two interviews are still available to watch). But the systematic policy of measuring the temperature everywhere and all the time, as well as the impressive use of digital tools, bring useful lessons to Western countries, many of which seem confused still about what to do.
Here we continue to hesitate. There they have a frightening policy of absolute, top-down control. Surely there is an in-between approach.