We have the most conviction in the China consumer sector as it has seen a sharp cyclical recovery since the second half of last year, beginning in the luxury segment and now spreading to the mass market. Much of this is policy driven as the government policy in the 13th five-year plan is to “reshore consumption” and boost “supply-side reform”. Shopping malls are busier and retailers are turning optimistic. But how long will this cycle last? We believe the cyclical recovery could surprise and identify the key reasons in our latest research. More importantly, there are non-cyclical structural forces at work with declining saving rates, an ageing work force and the rise of Chinese millennials poised to sustain growth. The structural changes can also explain why the government is so obsessed with high GDP growth as China is racing against time and needs to get rich before it gets old.
Francis Cheung was appointed managing director of China-Hong Kong strategy in November 2008. Prior to that, he was head of telecoms research, a role he held from August 2002. Francis consistently ranks as one of the region’s top analysts in polls conducted in Asiamoney – number one telecoms analyst and Hong Kong and China strategist – and Institutional Investor.
Fracnis’ career as an Asian telecoms analyst began in 1995 at Credit Suisse First Boston, and he later moved to Merrill Lynch. Francis has also worked in the USA as a certified public accountant with Deloitte & Touche and Franklin Templeton. A chartered financial analyst, Francis has a BSc degree from the University of California, Berkeley and an MBA from the Wharton School of Business