Bloomberg Businessweek - USA (2020-06-29)

Bloomberg

Businessweek

(USPS

080

900)

June

29,

2020

(ISSN

0007-7135)

H

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4662

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68

*FIGURES FOR JANUARY AND FEBRUARY NOT PROVIDED BECAUSE OF THE LUNAR NEW YEAR. DATA:

NATIONAL

BUREAU

OF

STATISTICS

OF

CHINA,

BLOOMBERG

INTELLIGENCE

TherenewedcoronavirusoutbreaksinChinaandSouth

Koreathreatentoputthecountriesbackintoa softlock-

down.ButEastAsiadidhavea fewmonthsofcalm.Bars

andrestaurantswereopen,asweregyms.Theexperi-

enceoftheseearlymoversmaygiveussomeclueson

wherethepent-updemandisintheU.S.Sowhatwere

thoseluckyAsiansspendingtheirmoneyon?

ThefirstthingtheChinesedidwastakeoutinsurance

policiesagainsttheircentralbank’sprintingmoneyand

stokinginflation—theyboughtapartments,longseen

as a storeofvalue.InMayhomesalesquicklyreversed

April’sdecline,withpricesinfirst-tiermegacitiesjump-

ing 8.6%froma yearago.NorthAsiansseemtofavordura-

ble goods.FromChinatoSouthKorea,carsalesstaged

a sharpV-shapedrebound.Peoplewerealsospending

moneyonhomeimprovement,withfurnituresalesback

up in China.

Meanwhile, demand for pure consumption goods, such

as clothing, remained sluggish in China as well as South

Korea. The tilt toward durables makes sense, because con-

sumers still feel fragile. Taiwan never went into a lock-

down, yet its consumer confidence index continued to

nose-dive in May, to 64.9 from a January high of 85.3, data

provided by the Research Center for Taiwan Economic

Development show. June data may be worse, as the recent

flare-ups knocked out any hope of a travel boom.

So welcome to the new normal. Trillions of dollars

unleashed by central banks, plus bruised consumer sen-

timent, turn us all into investors and savers. Restaurants

may fill up again, but we won’t be ordering lobsters any-

time soon. <BW> �Ren is a columnist for Bloomberg Opinion

◼ LAST THING

●VALUE-MINDED

Withconsumer

confidencelow,

shoppersshunned

consumablesand

favoreditemsthat

couldbeseenas

investments,such

asapartments,

furniture,andcars.

With Bloomberg Opinion

By Shuli Ren

Amid the Pandemic,

Shoppers Think Long Term

● Chinaeconomicactivity,

year-over-yearchange

Floorspaceofhomessold* Autounitsales

Clothing sales* Catering servicessales*

6/2015 5/2020

4 0%

0

-40

-80

● EASY MONEY

The People’s Bank

of China flooded

the economy with

money. In May its

benchmark rate fell

to as low as

1.3%

from 3% at the

beginningoftheyear.

● PRIVATE RIDES

Fears about using public transportation may have

helped spur car sales’ sharp rebound.

● SLOW SALES

South Korea

department-store

sales fell 5% to 7%

in May, estimates

Nomura Securities

Co. That’s an

improvement—sales

plunged 36.8% in

March.