Xi Jinping’s China is bouncing back and making overtures to western business. While breathing new life into multinationals’ top lines, it is also bringing a fresh quandary: whether to invest in the world’s second-largest economy as geopolitical tensions over the fate of Taiwan intensify.

Since Beijing ditched all Covid-19 restrictions in December, pent-up demand in the retail sector has fuelled a faster than expected recovery. China’s 4.5 per cent economic expansion in the first quarter has made its way into western brands’ earnings, especially at the top end of the consumer spectrum.

Take Porsche, which reported a record 18 per cent jump in sales driven by China, the German luxury car maker’s largest market. Or LVMH, similarly boosted by buoyancy in the world’s biggest luxury goods market, which the French group said had driven a 17 per cent surge in first-quarter sales just as growth plateaued in the US. Meanwhile, its Paris-based rival Hermès hailed “a very good Chinese new year” as it revealed a 23 per cent jump in revenue. In these higher spheres, consumers can be charged 30 per cent more for luxury goods in China than in Europe, according to Morgan Stanley.