China has stood out as the only major economy in the world to deliver positive economic growth in the pandemic-stricken 2020 gaining from quite a few factors.
The country has witnessed continued strength in export levels, largely led by solid global demand for coronavirus outbreak-related goods. Going on, market experts believe that China’s timely control of the virus outbreak last year helped factories tap global demand. Also, easing monetary policies helped in economic growth recovery.
Glimpse of Economic Data
According to data from the National Bureau of Statistics, China’s GDP grew 6.5% in the fourth quarter of 2020, after 4.9% growth in the third quarter, per a Reuters article. The metric also beat economists’ forecast of 6.1% growth, according to a Reuters' poll. Notably, the world’s second-largest economy recorded economic growth of 2.3% in 2020. There is no doubt in the fact that China’s economy has come a long way from the steep 6.8% fall in the first three months of 2020, per a Reuters article.
China’s exports also climbed 18.1% year over year in December, in comparison with the 21.1% rise recorded in November. Meanwhile, imports rose 6.5% year on year in December versus November’s 4.5% increase. Notably, both the metrics beat analysts’ expectations of a year-over-year increase of 15% for exports and a rise of 5% for imports in the same period, according to a Reuters’ poll.
Remarkably, trade surplus in December came in at $78.17 billion, beating analyst expectations of $72.35 billion, per a Reuters’ poll. It also compares favorably with the $75.40-billion surplus in November. Going on, the trade surplus came in at $535 billion for 2020, up 27% from 2019 as well as the highest since 2015, per a Bloomberg article.
Going on, China surpassed its previous record for renewable energy installations in 2020 with a huge addition of wind power. China added nearly 72 gigawatts of wind power last year, more than double of the previous record, according to the National Energy Administration (as mentioned in a Bloomberg article). Moreover, the country added about 48 gigawatts of solar (the most since 2017) and around 13 gigawatts of hydropower, per the same article.
The world’s second-largest economy also purchased record volumes of crude oil, copper, iron ore and coal in 2020, per a Reuters article. Considering China’s strong performance in 2020, analysts are projecting economic growth to rebound to 8.4% this year, before slowing to 5.5% in 2022, per the same article.
However, resurging coronavirus cases in China are a concern. The renewed cases have prompted the government to dissuade citizens from travelling during the much-awaited Lunar New Year holidays, per a Bloomberg article.
China ETFs Hitting a 52-Week High
Against this backdrop, investors can keep a tab on a few China ETFs like
iShares MSCI China ETF ( MCHI Quick Quote MCHI - Free Report) , iShares China Large-Cap ETF ( FXI Quick Quote FXI - Free Report) , SPDR S&P China ETF ( GXC Quick Quote GXC - Free Report) , Invesco Golden Dragon China ETF ( PGJ Quick Quote PGJ - Free Report) , iShares MSCI China Small-Cap ETF ( ECNS Quick Quote ECNS - Free Report) and Xtrackers MSCI All China Equity ETF ( CN Quick Quote CN - Free Report) which ruled the 52-week high chart on Jan 19. MCHI
This fund tracks the MSCI China Index. It comprises 592 holdings. The fund’s AUM is $6.92 billion and expense ratio, 0.59% (read:
6 Predictions for the ETF World in 2021). FXI
This fund seeks long-term growth by tracking the investment returns, before fees and expenses, of the FTSE China 50 Index. It comprises 50 holdings. The fund’s AUM is $4.23 billion and expense ratio is 0.74% (read:
Top Foreign ETFs of 2020 That Are Up At Least 40%). GXC
The fund seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P China BMI Index. It comprises 806 holdings. The fund’s AUM is $1.98 billion and expense ratio is 0.59% (read:
ETFs in Focus on Alibaba's Strong Fiscal Q2 Earnings). PGJ
This fund follows the NASDAQ Golden Dragon China Index, which offers exposure to the U.S. exchange-listed companies headquartered or incorporated in the People’s Republic of China. It holds a basket of 70 stocks. The product has an AUM of $262.7 million and charges 70 basis points in annual fees.
This fund tracks the MSCI China Small Cap Index. It comprises 270 holdings. The fund’s AUM is $62.4 million and expense ratio, 0.59%.
The fund seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI China All Shares Index. It comprises 229 holdings. The fund’s AUM is $30.9 million and expense ratio is 0.50%.
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