China: the Worst Has Passed?

China: the Worst Has Passed?

2021-07-16 • Updated

China released GDP: good or bad?

15 July, China released the data about the national gross domestic product. GDP growth in the 2nd quarter of 2021 was 7.9% comparing with the same period of 2020. The growth rate in the 2nd quarter was slower than the 18.3% growth registered in the 1st one. This fact describes how much the Chinese economy had suffered from COVID-19. Rapidly recovered China’s economy basically reaches pre-covid trend.

The growth rate of the world's 2nd largest economy has slowed down. However, it is still on track to reach 6% annual growth. Retail sales in June rose 12.1% year over year, which means that people are still spending money, mostly on restaurants and catering services. At the same time, the production of steel and cement decreased in June from the previous month. The combination of these factors suggests that China’s economy is going to rely more on consumer demand. This fact fueled optimism that China’s economic growth is becoming more balanced.   

How about COVID-19?

On Wednesday, the National Health Commission reported that the country has vaccinated at least half of its population at least with one dose as 1.4 billion vaccines have been used. For now, the main goal of China’s anti-Covid-19 campaign is the vaccination of teenagers between 12 and 17 years old by the end of October. As the National Health Commission reports the main goal is to vaccinate at least 70% of the population by the end of the year.

What does it mean for traders?

As China’s economy is 2nd largest in the world it makes a significant impact on the number of assets from the trader’s list. First, the growth of China’s economy has a significant impact on the oil demand in the world.

Second, China is the main export destination for goods from Australia and New Zealand. Chinese economic growth increases the demand for key goods from these countries which leads to an increase in capital flow and respectively forms a tendency for AUD and NZD to appreciate against a basket of currencies. Last but not the least, traders from all over the world use HK50 and Alibaba stocks to invest in China’s economy. Let’s check what is going on with these assets in the next paragraph!

Technical analyses of HK50 and Alibaba stock price.

On the daily HK50 chart, the bullish flag has occurred. The price bounced off the bottom line of the flag and broke through the 200-day moving average. Right now, it is heading towards the top line of the flag, which is 29100. If the price breaks this resistance level the target will be 31000. This is a great opportunity to open a long position! On the flip side, in case the price breaks the support level of 26900, it will aim towards 24900.

HK50Daily.png

On the daily Alibaba chart, bullish convergence was formed. The price is trying to cross the 50-day moving average. In case it happens, the first target price will be $220, which is the approximately 100-day moving average. If the impulse is strong enough, it will hit the next targets of $230 and $245 quickly. The $210 level is a great choice for a stop loss. 

ALIBABADaily.png

Similar

Time to Short US Economy
Time to Short US Economy

Why? Despite the fact that analysts and experts have been predicting the US stock market crash during pash year S&P500 doubled since March 2020 crush and NASDAQ is also gaining permanently…

Latest news

GBP/USD Is Ready for Reverse Up
GBP/USD Is Ready for Reverse Up

GBP/USD is moving inside the ascending channel. Since it’s in the lower part of this channel, the pair should reverse up and continue moving in zig-zag.

Alibaba: Have You Lost Your Faith in China?
Alibaba: Have You Lost Your Faith in China?

What happened? Nearly one year later, Beijing started to concern about Alipay, which combines a digital payments platform with other traditional financial products such as loans, wealth management, and insurance…

Deposit with your local payment systems

Be on top of your game

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera