Investors & Advisors | Support |
  • Australia

  • Austria

  • Denmark

  • Finland

  • Germany

  • Iceland

  • Italy

  • Luxembourg

  • Netherlands

  • Norway

  • Spain

  • Sweden

  • Switzerland

  • United Kingdom

  • United States

  • Location not listed


China’s Reopening Economy May Boost Non-U.S. Growth Equities

China’s reopening offers growth potential and helps sustain trends in automation, digitalization, energy transition and health care innovation.

China’s Reopening Economy May Boost Non-U.S. Growth Equities

Key Takeaways

Reopening in China should bolster non-U.S. growth stocks and spur global economic growth.

Companies in the travel and consumer sectors should see significant growth acceleration as restrictions ease.

Opportunities can be found in stocks positioned to benefit from specific growth trends and select premium brands with high exposure in Asia.

China's Controlled Reopening May Boost Global Economic Growth

The Chinese government recently ended its zero-COVID policy to allow a controlled reopening of its economy. We believe this development improves the outlook for non-U.S. equities because it should spur global economic growth.

While the rest of the world enjoyed economic recovery as the pandemic waned, China saw growth stall. Its restrictive policies on mobility and gatherings to fight COVID resurgence resulted in economic contraction as consumer and business activity all but ceased.

The government began to roll back restrictions in late 2022. And we believe select industries and companies could see a significant inflection in growth as pro-growth fiscal and monetary policies kick in. The government’s easing of corporate regulation, such as that it imposed on Big Tech companies last year, should also drive growth.

Travel and Consumer Sectors Should Bounce Back as Restrictions Ease

The zero-COVID policy led to a significant drop in domestic tourism revenue. See Figure 1. We expect the lifting of restrictions first to benefit domestic travel stocks, including airlines, hotels and travel agencies. For example, hotel chain operators in China should see a swift recovery in occupancy and room rate growth.

Figure 1 | China’s Domestic Travel Revenue Rebounds as Restrictions Ease

China’s Domestic Travel Revenue Rebounds as Restrictions Ease

Data from 1/1/2011–12/31/2022. Source: CEIC. *Estimated revenue for 2022. The renminbi (RMB) is the official currency of the People's Republic of China.

Increased air travel should lead to higher engine overhaul and maintenance activities. We also expect international travel to recover shortly after domestic travel. Duty-free sales should surge after years of stagnation. Luxury companies like Pernod Ricard, L’Oréal, Hermes and LVMH will likely see meaningful growth from this trend.

Life insurance companies, such as AIA Group, a leading Hong Kong-based life insurance provider, could also benefit. As cross-border travel recovers, we expect a significant growth tailwind because mainland Chinese visitors to Hong Kong represent a substantial portion of life insurance sales.

The zero-COVID policy significantly reduced consumer spending and excess savings. We estimate that current cumulative extra savings are equivalent to 14% of annual consumption in China. Pent-up demand could drive significant growth acceleration in the consumer sector.

Leisure apparel brands, such as Puma and Li Ning, and premium brands like Hugo Boss, Mercedes, Hermes and LVMH, may also see significant growth tailwinds as consumer activity resumes.

Ongoing Growth Trends Fuel Investment Opportunities

Despite high inflation, well-respected consumer brands and luxury goods names are benefiting from resilient demand. Premium companies in apparel, beauty, spirits and automobiles with high exposure in China and other parts of Asia are among the leaders in this trend. 

We are also finding opportunities in companies positioned to benefit from these ongoing growth trends:


Wage inflation and shifting supply chain dynamics, including plans for nearshoring and onshoring, are driving sustained investment in new and more efficient production capacity.


Digital transformation supports information technology. The acceleration of digitalization benefits technology companies exposed to growth in IT services, artificial intelligence, cloud computing automation, digital payments and apps, and software.

Health Care Innovation

Health care innovation is driving opportunities. We like innovative companies using health care technology, equipment and outsourcing that we believe can help provide improved cost and delivery efficiencies.

Healthy Lifestyle Choices

Companies tied to consumers’ commitment to healthier lifestyles and a higher standard of living should also benefit from China’s reopening and recovery. We see examples across a variety of industries. These include athletic apparel, higher-quality food and beverage options, and state-of-the-art health care.

Jim Zhao, CFA
Jim Zhao, CFA

Vice President

Portfolio Manager

Explore Our Global Growth Equity Capabilities

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

References to specific securities are for illustrative purposes only, and are not intended as recommendations to purchase or sell securities. Opinions and estimates offered constitute our judgment and, along with other portfolio data, are subject to change without notice.

No offer of any security is made hereby. This material is provided for informational purposes only and does not constitute a recommendation of any investment strategy or product described herein. This material is directed to professional/institutional clients only and should not be relied upon by retail investors or the public. The content of this document has not been reviewed by any regulatory authority.