Wealthy Nations Daily Update - China

Today is very quiet in the market with Japan out for Health-Sports day, the US out for Columbus Day and Canada out for Thanksgiving. The Chinese are getting back to work after their 1st to the 7th October Golden week holiday which marks the founding of the People’s Republic back in 1949 by the communist party and is one of the busiest times of the year for the Chinese.

The Xinhua news agency reports that 750 million trips were taken during the seven days of Golden Week with 639 million of them via cars according to the Ministry of Transport. Beijing received 11.5 million tourists during the week and 400 portable toilets were installed in Tiananmen Square to cope with the influx. Sales at restaurants amounted to 1,082 trillion yuan, about USD17 billion, the equivalent of Iceland’s GDP for the whole of 2014 and accounts for an 11% jump from 2014’s holiday week.

More than 4 million Chinese travelled abroad during the week according to estimates with the big loser this year Hong Kong, a past favourite destination, with Japan, South Korea and Thailand the top three destinations. Indeed reports from the Hong Kong retailers association suggest the Chinese infatuation with the former British colony is waning as sales struggled in the week.

It is also reported that 70,000 couples in Jiangsu Province, just one of the Chinese 31 regions, got married during the week, with over 2 billion Yuan ($315 million) spent on wedding banquets in the province alone. In nearby Shandong province newlyweds snapped up white goods with sales surging 53% on 2014, according to the commerce ministry.

One of the favourite pastimes during the week was to visit the movies with an estimated 1.85 billion yuan ($290 million) spent at the box office, a jump of 70% on last year and a tripling since 2013. Strangely the bestselling movie was a low cost home grown comedy, Goodbye Mr Loser, about a poor, clumsy and depressed middle aged man with box office takings of 593 million Yuan.

The People’s Bank of China fixed the yuan at 6.3406 versus the US dollar this morning, the biggest one day appreciation in over six weeks, and the spot rate is now trading at 6.3230 the strongest level since the August adjustment and a 1.39% appreciation since the August lows.

It does appear as though China’s transition from an export-led economy to a more consumer orientated economy is holding up well and some forecasters are now moving up their growth estimates for the fourth quarter on the back of latest economic releases.