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Opinion
Shuli Ren

China’s Revenge Spenders Are Just Warming Up

As the nation reopens, there is pent-up demand for luxury goods. But will the enthusiasm of China’s cashed-up consumers last? 

Revenge spending.

Revenge spending.

Photographer: Tomohiro Ohsumi
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Global investors are flocking back to mainland China’s $10 trillion stock market as the nation reopens and races toward herd immunity. They are betting that the Chinese will be partying and popping open a lot of $200-a-bottle baijiu, the pricey fiery liquor manufactured by the likes of Kweichow Moutai Co., this Lunar New Year.

After all, betting on pent-up demand unleashed by the relaxation of Covid policies can be a great trade. In the US, consumer services companies rose by 17% six months after the initial reopening in March 2021, according to data compiled by Morgan Stanley.