The Covid pandemic has had deep and impactful effects on economies across the globe.

Countries still caught in the grip of the pandemic have been astonished to find that China has come out the other side stronger and more resilient, giving the rest of the world hope of an eventual return to normality.

In December 2019, China publicly reported its first case of COVID-19. This was nearly a full three months before it reached our shores in New Zealand.

The effects on the Chinese economy seemed to be severe, but have turned out to be short-lived, because many economic indicators are back near pre-crisis levels already.

For example, Chinese gross domestic product (all goods and services produced) has historically grown at about 6 per cent a year. In the first quarter of this calendar year, when the pandemic was at its peak, its GDP fell nearly 7 per cent.

GDP rebounded 3 per cent

However, it rebounded 3 per cent in the second quarter, reversing nearly half the Covid impact already. Share market buoyant This buoyancy has also been reflected in the Chinese share market.

The Shanghai SE Composite Index was down sharply in January to March, falling 15 per cent in local currency. However, this index held up reasonably well compared to the S&P500, which fell over 30 per cent from its highs in February to the lows in March.

Since then, the Chinese market has rebounded strongly, finishing the seven months to July up over 11 per cent versus the S&P500, which is virtually flat.

This outperformance was driven by a surge in investor sentiment in late June. Investors foresaw another bull market for China, due to it being less affected by the coronavirus outbreak than other major regions.

Since coming out of lockdown at the end of March, there have been some big changes in consumer behaviour as China adapts to a new post-COVID world.

They’re patriotic

Chinese become patriots In particular, local Chinese have become more patriotic. They’re looking at the United States and seeing how much of a basket-case the US government’s handling of the virus has been and are praising their own government’s response.

The Chinese government went hard and fast with lockdown measures which may have seemed extreme at the time but are now being praised by locals.

China is also a major exporting nation. This means it relies heavily on the demand for its products from the rest of the world.

So, even though China came out of lockdown early, the rest of the world did not (and some countries still have not).

They’re buying local

This has led to a big shift by Chinese consumers to support local and domestic brands, particularly Alibaba (the Amazon of China) and Tencent (games and social media).

This isn’t a trend specific to China, but when a nation of 1.4 billion people makes changes like this, it sends ripples throughout the globe.

A few industries are seeing big changes in behaviour. One is the tourism industry.

With global borders shut, the Chinese (like Kiwis) are turning to domestic travel. This has led to a boom in the southern Chinese provinces, like Hainan, and in top five-star hotels because they’re considered more hygienic.

Others are the cosmetics, food, and sports apparel industries.

Naturally, health has become a huge focus over the past few months. People are incorporating more protein into their diets and, with gyms closed, many Chinese have taken up jogging. This boosts local sports brands, such as Li Ning and Anta Sports, versus Nike and Adidas.

In cosmetics, too, Chinese women are supporting local cosmetics brands like Judy Doll and Perfect Diary. They’re going from strength to strength at the expense of big multinationals like L’Oréal and Estée Lauder.

Students staying home

In the education industry, there has been an upheaval.

Schooling abroad is a long-term commitment for any student (and parent) and not a decision taken lightly.

We’re already seeing Chinese student enrolment numbers to schools in the United States and Australia at nearly half the levels they were pre-Covid.

Students are worried about the increase in infections, heightened level of racism towards Chinese people, and the constant changing of visa requirements.

So, many students are now opting for local rather than foreign education.

There will always be some exceptions, but China is also experiencing many trends we’re seeing here in New Zealand:

• The acceleration of digital payments because cash is considered ‘unhygienic’.
• A significant step up in online sales as everyone becomes more accustomed to buying online.
• ‘Suburbanisation’ or de-urbanisation now that working from home is becoming more commonplace.
• Increased used of cloud computing, which offers better flexibility and reliability for businesses.

During a crisis, the rule of thumb is that it’s the survival of the fittest, whether it’s people, companies, or economies.

Those that survive (or are less impacted), usually become stronger and more resilient over the longer term.