11 trends defining China in the Year of the Ox

We lay out 11 trends in China in the Year of the Ox. What will these mean for investors?

08 Feb 2021

Four Facts About Chinese New Year

  1. Almost 1.3 billion people in China will take a week-long holiday.
  2. Chinese New Year, or Lunar New Year, is celebrated all over the world, with national holidays also in Singapore, South Korea, Malaysia, and other countries.
  3. Over 700 million people will tune in for the CCTV New Year's Gala on Chinese New Year Eve on February 11 – making it the biggest TV audience on the planet.
  4. Though COVID-19 controls will be in place, travelers will make an estimated 1.175 billion trips in and around the period to return to their hometowns for the holiday.

Is 2021 a year for bulls?

It certainly is for oxes because the Year of the Ox begins on the first day of Chinese New Year on February 12.

In Chinese culture the ox is said to stand for hard work, positivity, honesty, and intelligence - but what does the Year of the Ox mean for investors?

The answer might lie in the past.

In 2009 - the last Year of the Ox - a Democrat took over the US presidency and the world economy began to recover after a historic downturn.

But turning to the present, and specifically to China, here are 11 trends we think will define China in the Year of the Ox:

#1 A robust economic rebound. China’s economy is forecast to grow 8.1% y-o-y in 2021, faster than the US (5.1%), Euro Area (4.2%) and Japan (3.1%), according to the latest estimates form the International Monetary Fund (IMF)1.

More than leading the world in terms of annual growth, China will also make the largest contribution to global economic growth 2021, accounting for 19.1% overall, vs 15.7% for the US, according to IMF figures.

#2 A war on waste. 35 million tonnes of food – enough to feed 30 to 50 million people – is wasted in China every year, according to the International Fund for Agricultural Development2. To reduce waste, cut pollution and protect food supplies, the Chinese government will introduce new laws that limit restaurant orders, ban social media videos promoting binge eating, and charge diners for excessive leftovers3.

2021: GDP Growth Expectations (%-YoY)

Source: IMF World Economic Outlook, January 2021

#3 Further into space. China’s space agencies have Mars missions, space stations, and sea-based rocket launches in the works for 2021, and these are part of a plan for more than 40 space missions in the year4. With trips to Jupiter and Venus planned for 2029 and 2030, respectively, China is building on its scientific superiority to explore new frontiers.

#4 Ladies in the lead. UBS believes that women will be the core driver of the next stage of China’s consumer boom. High female labor force participation, rising disposable incomes, and smartphone penetration are just three of the many factors that make women in the 20-to-40 age demographic a key market, estimated to be worth RMB 5 trillion (USD 770 billion) in 20205.

#5 Rerating in real estate. Cleaning your house is a Chinese New Year tradition, and China’s real estate developers will be doing just that, at least in the financial sense. New policies, called the Three Red Lines, are forcing property developers to get their houses in order and tidy up their finances. Simply put, it means two things: firstly, forced deleveraging and, secondly, the start of a rerating process in the China real estate bond sector which we believe is a great opportunity for fixed income investors.

#6 China: electric autoland. Elon Musk has grabbed the electric vehicle (EV) headlines in 2020, but China will grow its position as the world’s biggest Electric Vehicle (EV) market in 2021, with a 40% sales increase forecast by the China Association of Automobile Manufacturers6. Buyer subsidies help on the demand side, but China’s expanding EV expertise and increasing charging infrastructure are boosting the supply side and driving an industry seen as key for sustainable growth in both China and the world in the future.

#7 From fintech to foodtech. Chinese companies have led the way in fintech but now seem primed to take the lead in the next big thing – foodtech. The growth seen globally in lab-grown foods, like burgers, has reached China, and we are seeing a wave of capital enter the sector and a whole range of innovative ideas emerge, like synthetic shrimp and designer dumplings, that will appeal to Chinese tastes7.

#8 Better buildings. Flower-shaped football stadiums, mountain-shaped shopping malls, and silk textile-shaped theaters8 are just three recent building designs making headlines in China. Developers are shifting their mindset to not only house millions of migrants but also enrich the environments they live in. Given China’s growing innovation culture, we expect to see many more interesting and wonderful designs coming through in 2021 and beyond.

#9 Computing at (exa)scale. Countries seem to be openly competing with everything these days, and computers are no exception. In particular, supercomputers – or huge systems capable of making millions of calculations per minute. China had two of the world’s fastest supercomputers in 2020 and will look to go further and develop an exascale supercomputer in 2021 capable of a billion calculations per second9 – or 50x faster than the most powerful supercomputers being used today.

#10 Digiyuan? China completed small-scale tests of its own digital currency - the Digital Currency Electronic Payment system - in Shenzhen in 2020, and has announced plans for larger tests in Beijing, Guangzhou and Shanghai in 202110. Built on blockchain and intended to internationalize the yuan - China’s official currency - we expect this new technology to ramp up in 2021 and further establish China as the world’s leading cashless society.

#11 2 x Switzerland in 12 months. 17.9 million people will move to China’s cities in 2021, according to UN statistics. That’s equivalent to two times the population of Switzerland and a continuation of a process that over ten years will have brought 202.3 million people into urban areas. We see many impacts from this process but, most importantly, it is a key driver for the rebalancing of the economy toward consumer-driven growth, and a long-term support for a whole range of investment ideas.

17.9 million people will move to China’s cities in 2021, according to UN statistics. That’s equivalent to two times the population of Switzerland.

In sum, we believe China will continue to be a rich source of ideas, innovations and investment opportunities in the Year of the Ox. So be sure to speak to your client adviser today about the range of ways through which you can participate in China’s ongoing growth story.

More insights

Subscribe now

Perspectives matter. Tune in to our insights.


Singapore Retail Investors

PLEASE READ THESE TERMS AND CONDITIONS CAREFULLY BEFORE PROCEEDING. BY UTILIZING THE WEBSITE AND PAGES THEREOF LOCATED AT WWW.UBS.COM/AM-SG ("WEBSITE"), YOU ACKNOWLEDGE THAT YOU HAVE READ THESE TERMS AS WELL AS THE GLOBAL TERMS OF USE (collectively "TERMS") AND THAT YOU AGREE TO BE BOUND BY THEM. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, YOU ARE NOT AN AUTHORIZED USER OF THESE SERVICES AND YOU SHOULD NOT USE THIS WEBSITE.

This website is not intended for and should not be accessed by persons located or resident in any jurisdiction where (by reason of that person's nationality, domicile, residence or otherwise) the publication or availability of this website is prohibited or contrary to local law or regulation or would subject any UBS entity to any registration or licensing requirements in such jurisdictions. It is your responsibility to be aware of, to obtain all relevant regulatory approvals, licenses, verifications and/or registrations under, and to observe all applicable laws and regulations of any relevant jurisdiction in connection with your entrance to this website. Each investment product and service referred to on this website is intended to be made available only to residents in Singapore.

UBS reserves the right to change, modify, add or remove content on the website as well as these terms at any time for any reason without notice. Such changes shall be effective immediately upon posting. You acknowledge that by accessing our website after we have posted changes to these terms, you are agreeing to these terms as modified.

The materials on this Website are distributed by UBS Asset Management (Singapore) Ltd (company registration number: 199308367C), which is licensed by Monetary Authority of Singapore ("MAS") in Singapore pursuant to the Securities and Futures Act (Chapter 289 of Singapore). UBS Asset Management (Singapore) Ltd is part of the Asset Management business division of UBS Group AG. UBS Asset Management (Singapore) Ltd together with UBS Group AG and its group companies shall collectively be referred to as "UBS".

The information contained in this Website has been prepared and is intended for general circulation. The information does not constitute advice and does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The investment services or products referred to in this Website may not be suitable for all investors. UBS recommends that you independently evaluate particular investments and strategies and seek independent advice from a financial adviser regarding the suitability of such investment products, taking into account your specific investment objectives, financial situation and particular needs, before making a commitment to purchase any investment products. Investment involves risks. You should be aware that investments may increase or decrease in value and that past performance is not indicative of future performance.

The information contained in this Website is not an offer to buy or sell or the solicitation of an offer to buy or sell any investment product or to participate in any particular trading strategy. UBS, its officers and/or employees may have interests in any of the investment products referred to on this Website by acting in various roles. UBS, its officers and/or employees may receive fees, commissions or other benefits for acting in those capacities. In addition, UBS, its officers and/or employees may buy or sell investment products as principal or agent and may effect transactions which are not consistent with the information set out in this Website.

You fully understand and agree that, by making available this Website, UBS should not be construed as making: (a) any endorsement of any investment product referred to in this Website; (b) any representation that UBS has performed any due diligence on any investment product referred to in this Website; or (c) any representation that the information in this Website is complete, accurate, clear, fair and not misleading. The use or reliance on any such information contained in this Website is at your own risk and any losses which may be suffered as a result of you entering into any investment are for your account and UBS shall not be liable for any losses arising from or incurred by you in connection therewith. UBS is not responsible or liable for the accuracy and completeness of any such information or the performance or outcome of any investment made by you after receipt of such information, irrespective of whether such information was provided at your request.

Using, copying, redistributing or republishing any part of this Website without prior written permission from UBS is prohibited. Any statements made regarding investment performance objectives, risk and/or return targets shall not constitute a representation or warranty that such objectives or expectations will be achieved or risks are fully disclosed. The information and opinions contained in this Website is based upon information obtained from sources believed to be reliable and in good faith but no responsibility is accepted for any misrepresentation, errors or omissions. All such information and opinions are subject to change without notice. A number of comments in this Website are based on current expectations and are considered “forward-looking statements”. Actual future results may prove to be different from expectations and any unforeseen risk or event may arise in the future. The opinions expressed are a reflection of UBS’s judgment at the time this document is compiled and any obligation to update or alter forward-looking statements as a result of new information, future events, or otherwise is disclaimed.

UBS does not hold out any of its officers and/or employees as having any authority to advise you, and UBS does not purport to advise you on any investment product. Any investment will be made at your sole risk and UBS is not and shall not, in any manner, be liable or responsible for the consequences of any investment.

This Website and its contents are provided on an “as is” and “as available” basis. UBS does not warrant: (a) the accuracy, timeliness, adequacy commercial value or completeness of this Website or its contents, and expressly disclaims any liability for errors, delays or omissions in the contents, or for any action taken in reliance on the contents; (b) that your use of and/or access to this Website or its contents, will be uninterrupted, timely, secure or free from errors or that any identified defect will be corrected; (c) that this Website or any content will meet your requirements or are free from any virus or other malicious, destructive or corrupting code, agent, program or macros; (d) that any information, instructions or communications posted or transmitted by you through this Website is secure and cannot be accessed by unauthorised third parties; and (e) that use of the contents in this Website by you will not infringe the rights of any third parties. No warranty of any kind, implied, express or statutory, including but not limited to the warranties of non-infringement of third party rights, title, merchantability, satisfactory quality or fitness for a particular purpose and freedom from computer virus or other malicious, destructive or corrupting code, agent, program or macros, is given in conjunction with this Website.

You hereby agree to indemnify UBS and any of its officers, employees or agents against, and to keep UBS and any of its officers, employees or agents harmless from, any claims (actual and threatened), settlement sums, liability, loss, damages, costs (including solicitor and client costs and expenses (legal or otherwise)), charges, expenses, actions, proceedings, whether foreseeable or not which we may sustain, suffer or incur, directly or indirectly out of or in the course of or in connection with any the following: (a) any use of this Website or the contents by you, or any part thereof; (b) UBS having made available the Website; (c) any breach of these Terms by you, however arising; or (d) any negligence, act or omission, wilful default, unlawful act, fraud and/or misconduct on your part or violation of any rights of another person or entity by you.

The funds referred to in this Website have been authorised or recognised by the MAS for sale to the public in Singapore (the “Funds”). Copies of the registered Singapore prospectuses ("Prospectuses") referred to in this Website have been lodged with and registered by the MAS. The MAS assumes no responsibility for the contents of the Prospectuses. The registration of the Prospectuses by the MAS does not imply that the SFA or any other legal or regulatory requirements have been complied with.

MAS registration is not a recommendation or endorsement of a Fund nor does it guarantee the commercial merits or performance of such Fund. It does not mean that a Fund is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. UBS Asset Management (Singapore) Ltd has been appointed as the representative for the Funds in Singapore for the purposes of performing administrative and other related functions relating to the offer of Shares under Section 287 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA") and such other functions as the MAS may prescribe.

You may not assign your rights under the Terms without our prior written consent. UBS Asset Management (Singapore) Ltd may assign our rights under the Terms to any third party.

No person or entity who is not a party to the Terms shall have any right under the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore or other similar laws to enforce any term of the Terms regardless of whether such person or entity has been identified by name, as a member of a class or as answering a particular description. For the avoidance of doubt, this shall not affect the rights of any permitted assignee or transferee of the Terms.

These Terms shall be governed by, and shall be construed in accordance with, the laws of Singapore. The courts of Singapore shall have exclusive jurisdiction to hear and determine any suit, action or proceeding, and to settle any disputes, which may arise out of or in connection with these Terms and, for such purposes, you agree to submit  to the jurisdiction of the courts of Singapore. Each party hereby waives any objection which it might at any time have to the courts of Singapore being nominated as the forum to hear and determine any proceedings and to settle any disputes and agrees not to claim that the courts of Singapore are not a convenient or appropriate forum.

© UBS 2021 - the key symbol and UBS are among the registered and unregistered trademarks of UBS. All rights reserved.

Reset