China’s pandemic-battered economy is beginning to see consumers open their wallets wider, in accordance with KraneShares’ Brendan Ahern.
“We’re seeing the incremental rebound from the Chinese consumer,” the firm’s chief investment officer told “ETF Edge” this week. “[But] it isn’t like turning on a lightweight switch.”
The National Bureau of Statistics of China reports retail sales have been increasing since last November.
Ahern, who’s involved with the firm’s China-focused ETFs, expects quarterly earnings for Chinese corporations to enhance with each consecutive quarter — a forecast that will already be unfolding.
Tech giants Baidu and Tencent beat revenue expectations for the fiscal first quarter of 2023. Alibaba, however, missed revenue estimates.
“We’re actually hearing that for lots of the corporations … within the management calls, they’re chatting with how Q2 already is outpacing Q1, which outpaced Q4 of last yr,” Ahern said.
China’s reopening can also be anticipated to have a positive impact on the airline industry.
Singapore Airlines, Japan’s All Nippon Airways and Japan Airlines all noted demand from China as a think about future earnings while reporting net profits earlier this month for the financial yr ended March 2023.
GraniteShares’ Will Rhind sees the same growth trajectory.
“Domestic travel [is] rebounding … but we have yet to see that from the international sector,” the ETF provider’s CEO said. “It’ll come, but perhaps just not yet.”
Rhind told CNBC in a special interview later within the week that international travel from China could begin to rebound this summer following a sluggish start.
His forecast comes as a government-backed epidemiologist said the country’s latest Covid wave could infect 65 million per week by the tip of next month.
Rhind believes the recent Covid surge won’t affect the reopening’s trajectory, adding past lockdowns seen across China are “very, very much unlikely to be repeated.”
