The (surp)rise of the Dragon

As Bloomberg columnist John Authers points out in his latest column, China is currently showing the most positive economic surprises since the financial crisis. China published GDP figures for Q1 with growth of 4.5%, not only above consensus but with retail sales topping 10%. The rebalancing from fixed assets investments to services and the consumer is gaining traction, albeit it is partly explained by the lifting of the Covid-19 restrictions. Investors are still lukewarm to Chinese equities as they rightly fear political interference. Closer to home, a key beneficiary of the renewed consumer strength are luxury goods. We are invested in Kering in our European Value strategy.