In China’s economic recovery, tech – not the consumer – will be king

Suddenly the world seems a better place and there is growing hope for a return to normality. After the landmark election of Democrat Joe Biden as the next US president, the global picture looks a lot brighter and there is budding optimism, once the Covid-19 pandemic is resolved, that the world can finally get back on its feet.

Judging by the way the outlook is already shaping up, 2021 could prove a bumper year for global growth, with China’s economy in the vanguard of recovery. China could easily surpass expectations of 8 to 9 per cent growth next year as the economy bounces back from the coronavirus.

Factory production is getting back into full swing, exports are surging and consumer confidence is picking up sharply. With Beijing turning its attention towards the domestic economy as the blueprint for future prosperity, could China’s consumers provide the answer for a faster domestic-led recovery and lead the way to mass consumerism?

The thrust of the government’s 14th five-year plan, covering 2021 to 2025, is that China’s position as the world’s foremost industrial powerhouse is to be consolidated through greater reliance on domestic growth, and home-grown technology and innovation.

These are the hallmarks of China’s so-called “dual circulation” strategy to bring out the best of China’s internal markets, while insulating the economy from the vagaries of geopolitics. Beijing is quite right to switch its strategy to self-reliance while the downside risks of external sanctions and global turbulence persist.