China's Economy Powers Ahead While the Rest of -2-

In Australia, Conga Foods recently launched a line of locally made vinegars to reduce imports from Europe and tap into growing consumer demand for domestically made products. The company needs glass bottles for the vinegar from China because no suitable bottles are made in Australia, said David Valmorbida, director at the company.

"If we would have a reliable production source in Australia of the required bottles that are priced competitively, then we would definitely prefer to buy that locally," Mr. Valmorbida said.

Kleva Health, a San Francisco-based startup that sells at-home Covid-19 testing kits, needed large numbers of saliva collection tubes last summer.

David Yu, the company's 31-year-old founder, said he initially decided to go with tubes made in Canada but abandoned the plan after finding that ones made in southeastern China were less expensive and more accurate.

The company is awaiting approval from the U.S. Food and Drug Administration to sell the testing products to average Americans.

Expanding consumer market

Consumer spending in China bounced back by the fall. China's personal luxury-goods market is expected to have grown 7.6% in 2020, even as the global market contracted 20%, according to research firm Euromonitor International.

"While the rest of the world has stopped spending, the Chinese have carried on," said Fflur Roberts, Euromonitor's head of luxury-goods research.

While foreign direct investment, such as by businesses for production assets abroad, into the U.S. and Europe plummeted in the first half of this year, it largely held steady in China, where it was up 6.3% through November, compared with the previous year's 11 months, according to China's commerce ministry.

Money has flowed into China in other ways, adding momentum to its long-term goal of building up important domestic financial centers. Chinese markets, including in Hong Kong, accounted for 43% of the world's public listings last year, according to data from Refinitiv.

Foreign holdings of Chinese bonds hit a record 3.25 trillion yuan, or about $503 billion, in December, up 49% in a year, according to data compiled by Bond Connect Co.

The MSCI China index, which includes Chinese companies listed at home as well as those that trade in New York or other locations, rose 27% in dollar terms last year. The MSCI AC World index is up 14% in the same period, and MSCI's U.S. benchmark added 19%.

--Quentin Webb contributed to this article.

Write to Stella Yifan Xie at [e-mail], Eun-Young Jeong at [e-mail] and Mike Cherney at [e-mail]

(END) Dow Jones Newswires

01-13-21 1055ET