China Market Insider Corona crisis: China recovers even faster than expected
China’s manufacturing industry is recovering even faster than recently expected. According to analysts, one of the reasons for this is the fact that extensive lockdowns have largely been avoided.
The Corona crisis has “affected production in China much less than previously predicted”, according to a highly regarded report by market research institute Interact Analysis. It predicts that China’s total economic output in the production sector will continue to show positive growth of 0.9 % in this year of crisis, more than similar predictions were made in August this year.
Unlike Europe, China only resorted to extensive lockdowns for Corona at the very beginning of the crisis, but has largely avoided them since April, foreign analysts write to explain China’s rapid economic recovery. Since the second quarter of the year, industrial production has recovered steadily across the country, as there have only been isolated cities or regions, but no nationwide lockdowns.
Indeed, China’s manufacturing industry is currently experiencing the “fastest expansion” in almost ten years, writes the respected business magazine Caixin. “Both supply and demand have recovered in the post-epidemic period at the fastest pace in almost a decade,” Caixin writes in a report that takes into account the latest data from the manufacturing industry up to the end of October.
Last month, orders from China’s manufacturers have risen as sharply “as last seen only in November 2010,” Caixin reports. It was the fifth consecutive month of economic output expansion in China's manufacturing industry. And this despite the fact that China’s exports are still weak due to Corona lockdowns in many other countries.
China’s National Bureau of Statistics also confirms the positive trend. The value added of industrial enterprises in October rose by 6.9 % in real terms compared to the same month last year, similarly strong as in September, write China’s official accountants. For this purpose, they evaluated data from companies with annual revenues of 20 million yuan (about 2.6 million euro) or more. Analysts previously surveyed by the news agency Reuters had only expected growth of 6.5 %.
China’s automotive industry recorded a robust year-on-year increase in sales of 12.5 % in October, mainly due to strong demand for electric cars and commercial vehicles. Not only in the manufacturing industry, but also in other Chinese sectors of the economy there was a significant recovery, such as in the domestic tourism industry, although it still has not reached the level of the previous year.
China’s manufacturing industry, however, is “highly resilient”, and this has already become clear in recent years “through sustained growth and continued competitiveness in global exports”, writes the reputable Japanese business magazine Nikkei Asia in a recent analysis. The paper warned against the “myth” that China has passed the peak of its strength in the manufacturing industry, and in the long run more and more manufacturers will migrate, for instance to Southeast Asia. This idea is persistent, but “misleading”, writes Nikkei. Worldwide, he says, it would be better to prepare for the “incessant, further rise of the Chinese manufacturing industry”.