Expert insight

China’s economic rebound lowers the odds of a global recession

February 14, 2023

Qian Wang

Chief Economist, Asia-Pacific, and Head of the Vanguard Capital Markets Model

Why markets are optimistic
Why the impact may not meet expectations
China’s household excess savings diverge from trend lines starting in 2020
A line graph showing China’s annual household savings in RMB or yuan, from 2013 through the end of 2022. Actual savings spike in 2020 and reached 17.3 trillion yuan in 2022. Dotted lines show three trend lines that start diverging at the end of 2019 under different assumptions and all fall under the actual savings line to varying degrees: One trend line is aggregate savings growing at the trend rate from 2013 through 2019, ending with 17.2 trillion yuan at year-end 2022; another is saving rate growing at the trend rate from 2017 to 2019, ending with 16.2 trillion yuan in 2022; and the third at a savings rate held constant at the 2019 level, ending with 15.7 trillion in 2022. The difference between actual savings and the hypothetical trend line over the three-year period of 2020-2022 is the total excess savings accumulated during the pandemic, and it varies depending on which trend line is used.
Who would benefit the most from Chinese consumers
Why we might just avoid a global recession
Why our outlook for China’s long-term growth is guarded
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