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Goldman Sachs Upgrades China’s Growth Forecast as US Companies Invest in Country’s Consumer Market.

BusinessGoldman Sachs Upgrades China's Growth Forecast as US Companies Invest in Country's Consumer Market.

Many of the largest US companies are doubling down on China, betting on the nation’s vast consumer market and the potential for a post-pandemic rebound. According to the Wall Street Journal, McDonald’s Corp and Starbucks Corp are among the companies opening hundreds of new restaurants in China. Meanwhile, retailers Ralph Lauren Corp and Tapestry Inc, the owner of the Coach and Kate Spade brands, are launching new stores, and Tyson Foods Inc and Hormel Foods Corp are opening new facilities.

In early February, Starbucks’s interim CEO and longtime leader, Howard Schultz, said he remains “more confident than ever” that the company’s growth story in China is just beginning. The coffee giant plans to open 3,000 new stores in China by 2025.

McDonald’s is also bullish on China, having opened 700 new stores in the country last year. It plans to open an additional 900 this year, more than any other country and more than twice as many as it plans to open in the US.

Retailer Tapestry is investing about half of the $325 million it has set aside for capital expenditures and cloud computing in new store openings and renovations in China. CEO Joanne Crevoiserat said the company is “confident in the long-term opportunities for China as a growth vehicle.”

Similarly, in November, Tyson Foods told investors that half of the six new plants it expects to come online this year will be in China.

The move by these companies comes as economists forecast a pickup in growth in China. In January, Goldman Sachs upgraded its growth forecast for the country this year to 5.5 percent from an earlier target of 5.2 percent. Key gauges of consumer activity in January showed significant improvement, further fueling optimism about the country’s economic prospects.

With its massive population and growing middle class, China presents an enormous opportunity for companies looking to expand their global reach. Despite challenges such as trade tensions and a shifting regulatory landscape, many US companies are betting big on China’s consumers and its long-term economic prospects.

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