Consumer spending only makes up 35% of China’s GDP. The culture of thrift in China has caused massive amounts of household savings. But tax cuts and the government’s focus on infrastructure projects aims to help households. There is also a health insurance plan that would be provided to hundreds of millions more people over the next couple of years.
- iShares FTSE/Xinhua China 25 Index (FXI): up 19.4% year-to-date
- SPDR S&P China (GXC): up 23.6% year-to-date
For full disclosure, some of Tom Lydon’s clients own shares of GXC.
Max Chen contributed to this article.