Bouncing into the Chinese Year of the Rabbit 

FENG shui, the traditional Chinese practice of harnessing the flow of energy, indicates the Year of the Rabbit can pull people in different directions. For 2023 we well may see investors getting pulled in opposing directions, as hope and delivery could be at opposite ends of the year.

Looking to recovery in Chinese consumption

The pattern of post Covid-19 consumer spending in emerging markets has been characterised by a surge of “revenge spending” in the initial phase of economic reopening, followed by a slower pace of growth. The slowdown was due in part to rising inflation and higher interest rates which crimped real purchasing power.

China is expected to follow a similar pattern of post-Covid consumption, with consumers enthusiastically pursuing “revenge spending” in the Year of the Rabbit. This will be driven in part by the estimated RMB 6.6 trillion (S$1.3 trillion) in excess savings that have been built up during three years of zero-Covid.