- China’s post-covid economic recovery isn’t going as fast as many market watchers predicted.
- One of the most immediate warning signs investors are losing faith in the recovery narrative is that the Hang Seng China Enterprises Index fell into bear market territory Tuesday.
- 5 niche commodities including glass, natural gas and paper pulp tell the story of a slow recovery.
China’s economic recovery from draconian zero-Covid controls is faltering. Investors had very high hopes earlier this year that the world’s second-largest economy would roar back to life and help offset weakness in the global economy. However, six months later, those same hopes have faded into disappointment.
One of the most immediate warning signs investors are losing faith in the recovery narrative is that the Hang Seng China Enterprises Index fell into bear market territory Tuesday, down about 20% from its Jan. 27 peak.
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While equities are important to track, we shift attention to sliding commodity prices that might give further input about China’s economic growth miracle seen over the last several decades, which has yet to reemerge and ignite a spark. Maybe that’s because of an aging population or declining workforce or supply chain reset, or enormous debt loads — whatever is hobbling China’s recovery effort might indicate the days of expanding at 6% to 8% a year are over and only 2% or 3% is the new normal.