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Once again, China to the rescue!

Summary:
In 2009, China was the first to recover. As growth there surged in 2009, it began pulling the rest of the world away from the brink.Now it seems to be happening again. Here’s the FT: Factories across Europe are buzzing with activity again, encouraging some industrial bosses to invest in extra production as they shrug off the rise in coronavirus infections that is casting a shadow over the continent’s economic recovery.Many manufacturers adapted production sites quickly to protect their workers after the pandemic hit, and in recent months they have benefited from rising demand, driven by a rebound in exports, particularly to the resurgent Chinese market. . . .Ola Kallenius, chief executive of Daimler, said the maker of Mercedes-Benz cars was also enjoying a “remarkable

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In 2009, China was the first to recover. As growth there surged in 2009, it began pulling the rest of the world away from the brink.

Now it seems to be happening again. Here’s the FT:

Factories across Europe are buzzing with activity again, encouraging some industrial bosses to invest in extra production as they shrug off the rise in coronavirus infections that is casting a shadow over the continent’s economic recovery.

Many manufacturers adapted production sites quickly to protect their workers after the pandemic hit, and in recent months they have benefited from rising demand, driven by a rebound in exports, particularly to the resurgent Chinese market.. .

Ola Kallenius, chief executive of Daimler, said the maker of Mercedes-Benz cars was also enjoying a “remarkable recovery in China” where its sales have grown at double-digit rates for four consecutive months. “It is almost too good to be true,” he said. “They’ve managed a V-shaped recovery in the Chinese economy.”

Companies in other areas are benefiting from rising sales in China such as Gea Group, the German maker of machines that produce half the world’s beer, a quarter of its processed milk and a third of all instant coffee. 

“The strongest recovery now is definitely in China, where the virus has virtually gone and I would say people there are back to normal, so that is driving demand,” said Stefan Klebert, chief executive of Gea, which has five Chinese factories. 

PS. My comment section has recently been overrun by morons. So I need to say it again:

China: A very good country of 1.4 billion people

The CCP: A very evil government

Go China!!!


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Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

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