China's Economy Still Stagnant... "Normalization Expected by End of Next Month"

A transport aircraft of the Chinese People's Liberation Army Air Force arrived at Tianhe Airport in Wuhan, Hubei Province, the origin of the novel coronavirus infection (COVID-19), on the 17th, and medical personnel preparing to carry out COVID-19 quarantine activities are disembarking. (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] Although the Chinese economy, severely impacted by the spread of the novel coronavirus infection (COVID-19), is gradually finding its footing, it is analyzed that a considerable amount of time is still needed before it reaches the normalization stage.

According to Bloomberg on the 28th, when comparing figures such as traffic volume, carbon emissions, oil inventories, retail sales, and electricity demand using its own data, economic activity in China this week has recovered about 60-70% of the level before the COVID-19 outbreak. This is about 20% higher than two weeks ago.

The slowdown in the spread of COVID-19 appears to have had some influence. However, a significant number of migrant workers from rural areas, estimated to be over 300 million, have not yet returned, and those who have returned are undergoing quarantine processes, so it is expected to take more time to normalize.

The Ministry of Transport analyzed that about 200 million migrant workers will return to their original workplaces by the end of this month, and the remaining approximately 100 million will return around next month.

The New Energy and Air Research Center cited satellite data to explain that the amount of pollutants emitted from factories and nitrogen dioxide in the atmosphere is lower than usual. It is estimated that factory shutdowns due to COVID-19 reduced carbon emissions by 100 million cubic meters.

Electricity demand in eastern China and other regions is also significantly below normal. During the first two weeks of this month, the average daily number of cars sold nationwide in China was 811, a sharp drop of 92% compared to the same period last year. In a recent survey conducted among 150 American companies operating in China, 28% responded that they expect normalization only by the end of next month.