Factories reopen in China where economic activity is resuming solidly. A recovery correlated with an epidemic in very sharp decline.
This is of course only fragmentary information but it is encouraging. Factories are gradually reopening in China even if they are not yet operating at full capacity. Airbus has thus restarted its assembly line for the A320 family based in Tianjin, south of Beijing. For its part, Toyota is gradually reopening its three Chinese factories. In Asia and in particular in China, “we are seeing a restart, many projects have started up again” and “if we do not respond to it, our competitors will take the markets”, confirmed to AFP the president of the Alliance Industrie du Futur Bruno Grandjean, CEO of the industrial group Redex.
On March 12, the National Development and Reform Commission (NDRC) published a circular encouraging the resumption of activities by foreign companies. It requests the competent local authorities to carry out regular visits to foreign companies and to monitor their projects in order to assess their situation (activities, production, investments).
95% of Chinese companies (excluding SMEs) in activity
According to a survey study conducted by the French Embassy and Business France in particular, half of the French companies established in China anticipate a resumption of activity by the end of March. Why such optimism: 16 of the 31 provinces of China would no longer (officially) have any patients with COVID-19 (Tibet, Qinghai, Fujian, Anhui, Xinjiang, Jiangxi, Shanxi, Hunan, Gansu, Yunnan, Henan, Jiangsu, Chongqing, Tianjin, Guizhou).
China did not report any new local contamination on Thursday, a first since the start of the epidemic. But health officials have reported an additional 34 imported cases. China (excluding the territories of Hong Kong and Macao), where the epidemic broke out at the end of December, recorded a total of 80,928 cases, including 3,245 deaths and 69,601 recoveries. 34 new cases and 8 new deaths were announced between Wednesday and Thursday.
Nearly 80% of companies surveyed by the American Chamber of Commerce in Shanghai say they lack staff to open a complete production line. This is despite the fact that the Chinese authorities have prohibited layoffs linked to the virus. In this context, Chinese SMEs are very affected. Outside Hubei, 60% of SMEs and 95% of critical industrial companies have resumed activity according to the Chinese Ministry of Industry. However, most of them operate at low speed.
Chinese economy rebounds
According to the consulting firm Trivium, the Chinese economy would now operate at 69.5% of its capacity as of March 16, 2020. But Goldman Sachs is already predicting a 9% recession in China in the first quarter. Its forecasts for Chinese annual growth are now + 3% (against + 5.5% so far).
China has put in place a mechanism to preserve its economic fabric. Thus, on March 13, the Chinese central bank, which released in late February extensions or renewals of business loans, announced a drop in the reserve ratio of banks, freeing up 550 billion yuan (70.6 billion euros ) to support the economy. The People’s Daily announces on the front page “the reopening of 79% of major construction sites” in China.
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