Last year, China’s slowdown was cited as the biggest risk for global markets. The concerns were not unfounded. The Chinese economy grew at its slowest pace in decades last year. Some of the other economic indicators, especially automotive sales, also painted a grim picture of the Chinese economy.

China No Longer Seems to Be Biggest Concern for Global Economy

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Last year, China’s automotive sales fell on a YoY basis for the first time in more than two decades. The downtrend in car sales has continued in 2019 as well, and sales have fallen YoY in the first three months of the year. China’s economic growth has been gradually tapering down. Its crackdown on pollution and excessive leverage have also contributed to the economic slowdown. The country’s trade spat with the United States further hurt consumer and business sentiment, further amplifying the economy’s natural slowdown.

Economic indicators

While some of the economic data from China in 2019 has suggested stalling growth, we’ve started to see signs of bottoming out. At the beginning of the month, China’s PMI data was better than expected. Now, its March trade data also offered some mixed signals with exports beating expectations. However, imports were lower than expected.

Chinese equity markets have also rebounded, and the iShares China Large-Cap ETF (FXI) has gained 16.3% year-to-date based on its closing prices on April 12. The SPDR S&P 500 ETF (SPY) has risen 16.6% over the period. Alibaba (BABA), (JD), and Baidu (BIDU) have risen 37.8%, 46.0%, and 9.1% respectively. Apple (AAPL), NVIDIA (NVDA), and Advanced Micro Devices (AMD) have risen 26.6%, 42.6%, and 51.0%, respectively.

While some analysts saw China’s slowdown as the biggest risk for the global economy at the beginning of the year, it no longer seems to be the biggest concern now.

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