Daily Mail

China’s galling comeback

- Alex Brummer CITY EDITOR

China is not flavour of the month among the Western democracie­s at present. it is deplored for its human rights atrocities against the Uighur minority, demolition of democracy in hong Kong, the telecoms autocracy of huawei and above all the visitation of the Covid-19 pandemic. it will not be surprising that there are citizens in the UK who are less than thrilled with the rapid recovery of the People’s Republic from the disease-induced world slump.

in a globalised, connected world, it is impossible to unhinge from China’s economy in spite of the efforts of Donald Trump to punish Beijing for its cavalier approach to world trade.

But with the West looking at an americansi­zed £21 trillion shortfall in output as a result of Covid-19, it is hard not to draw some comfort from China’s recovery from the depths of recession.

Output in China rose by 4.9pc in the third quarter. The data shows almost all sectors of the economy – including retail sales, domestic travel, entertainm­ent, constructi­on and business investment – improving.

The upturn has been boosted by monetary easing, heavy borrowing and government infrastruc­ture investment in the provinces.

The spillovers for the rest of the world’s economy will be considerab­le. in spite of the blight of the new security law in hong Kong, it too is roaring back. The hong Kong Stock Exchange has been rewarded with a share of the ant Financial initial public offering worth an estimated £27bn. Meanwhile, hong Kong’s legendary real estate market is roaring back with a record 23,000 applicatio­ns for the first 391 apartments in a new 3,000 housing complex in Kowloon.

On the mainland, imports surged by 13pc, encouraged by improving retail sales which should be good for UK luxury firms such as Burberry and for motor car exports from Europe. investment in infrastruc­ture and constructi­on will be helpful for iron ore champions Rio Tinto, one of the biggest players in australian mining. China’s ruthless and unfettered test- and- trace approach to containing Covid-19, along with the fact President Xi Jinping doesn’t have to worry too much about the likes of andy Burnham and other local politician­s, mean that as well as being the source of the pandemic, it has been successful at containing the virus. Like it or not, China’s recovery could benefit us all especially if tourists were to regain their enthusiasm for Bicester Village and Selfridges.

it is all very dispiritin­g as the rest of the world suffers, but spending power speaks a language we can all understand.

Land grab

aS ThE grande dame of UK property, where Land Securities goes others are likely to follow. The decision of chief executive Mark allan to sell £4bn of assets, many of them sub-performing retail sites, signals a big change of direction.

The over-exposure of Britain’s real estate sector to shopping has been one of the big features of Covid-19, sending intu to Carey Street and hammering its would-be partner hammerson. Landsec will dispose of some of its London portfolio but it is not giving up on the capital.

The message is that it thinks that the Covid-19 desertion from urban centres is not permanent and they will come roaring back. Occupiers will want different, more flexible space which allows for home working and some retail and residentia­l mix. it doesn’t believe that London real estate has become moribund and thinks there is still a great deal of foreign interest in mature, leased London real estate. if the scale of the £5bn portfolio reportedly owned by the United arab Emirates ruler Sheikh Khalifa bin Zayed is an example, that is manifestly true.

Landsec shares have slumped more than 50pc from the high achieved in February. They still sell at a huge discount to underlying asset values. Property can be a slow mover in a slump. But the fact that Landsec exists at all is testimony to founder harold Samuel who recognised the value of bombed out London after the Second World War.

Life lines

BRiTain’S life and pensions companies are showing great creativity amid the Covid catastroph­e. Legal & General is putting its faith in UK science and innovation by investing £200m with the University of Oxford to build a new ‘Life & Mind’ centre, which will bring together its zoology, plant sciences and experiment­al sciences department­s.

iSa and policyhold­ers should be encouraged that hard- earned savings are being wisely invested in the nation’s future.

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