Chinese economy starts again to reach full productivity by the end of April

L'economia cinese riparte: a fine aprile al 100% della produttività

In Wuhan, which was the centre of Coronavirus outbreak, activities are about to start again. Along with the city, Chinese economy enjoys a recovery as well: the aim is to reach again full productivity by the end of April. They first launched the alert 51 days ago, on January 23rd, when they locked down the city because of the virus outbreak. The Chinese town, where 11 million people currently reside, is the last coach of China’s driving locomotive, which is ready to start again. Factories and selling stores are going to be open now. China will soon lead again worldwide economy. Françoise Huang, senior economist at Euler Hermes, sent a newsletter, subsequently reported by Reuters, to buyers: in her report, she claims that Chinese economy is 75% working, for the time being. As we just said, it will be running at full speed by the end of April.

Xi Jinping visit

Last week, on Tuesday, Chinese President Xi Jinping visited the city of Wuhan. The day after, some local companies, which supply commodities and essential utilities, obtained the authorization to resume their work activities. Companies that are playing a prominent role in the domestic and worldwide industrial chains can start again, then. Of course, prior to that, they must implement a number of measures to prevent the virus spread; besides that, they must obtain a formal permission, as imposed by the government of the province of Hubei.

The shoe industry

As reported by CNBC, activities that are classified as non-essential, as much as public utility services and agricultural production will supposedly start again on March 21st. Likewise, the shoe industry has started working again as well. “In some of China’s most important manufacturing centres, such as the provinces of Guangdong, Fujian and Zhejiang, operating capacity currently accounts for 80 to 90%, and things are slowly, progressively though, getting better – remarked Matt Priest, president and managing director of FDRA, while talking to Footwear News –. As regards manufacturers of materials and components, many of whom are based in several Chinese inland provinces, they are slowing down the supply chain. Their operating capacity accounts, for the time being, for 40 to 70%.

The retail

In China, not only factories, but also shops and department stores are about to open again. Hermés, which had shut down 11 selling stores during the outbreak peak-period, opened again seven shops. As reported by Bloomberg, last week, on Sunday, customers were standing in a queue to get in a Chanel boutique, located in a luxury department store, in the city of Hangzhou. According to the press agency, attendance of clients in Chinese stores, selling the products made by fashion brands, is slowly getting more lively; as for buyers, they look somehow animated by the so-called “revenge spending”. In other words, buyers who have been suffering from shopping abstinence are ready to catch up the buying they missed before. However, according to business analysts, such shopping is unlikely to offset sales that have gone up in smoke. Amrita Banta, managing director of Agility Research, pointed out: “It looks like China has entered a new phase, as people in the biggest cities prove to be cautiously optimistic. We observe a slow, confident though, recovery”.

 

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