China’s 30-year low: industrial production falls 13.5% over COVID-19

By Javier Triana

Beijing, Mar 16 (efe-epa).- China’s industrial production plummeted 13.5 percent year-on-year in the first two months of 2020, its worst decline in 30 years, due to the impact of the novel coronavirus pandemic, the country’s national statistics office Monday.

The figure – well below analysts’ forecasts, who predicted about a 1.5 percent growth – is the worst for industrial production since January 1990’s 21.20 percent drop, when the statistics were first gathered. It shows COVID-19’s impact in China not only at a human level but an economic one.

“While domestic conditions should improve slowly in the coming months, the mounting global disruption from the coronavirus will hold back the pace of recovery,” analyst Julian Evans-Pritchard of British consultancy firm Capital Economics said in a report, adding that the data had been much weaker than expected and pointed to a deeper recession than that of the 2008 global financial crisis.

This drop is a stark contrast to December data, which showed that Chinese industrial production increased by 6.9 percent year-on-year.

Industrial production measures the activity of large companies with a minimum 20 million yuan (about $2.86 million) annual turnover.

Manufacturing production fell by 15.7 percent in the same period, due to the 6.5 percent drop in production in the mining sector.

Products of which manufacturing did grow in January and February are face masks (127.5 percent), smartwatches (119.7 percent), frozen meat (13.5 percent) and instant noodles (11.4 percent), highlighting the demand caused by prevention measures against the virus.

Retail sales fell 20.5 percent year-on-year, according to the statistics office.

The agency also offered China’s fixed-asset investment data Monday, which plunged 24.5 percent compared to the same period last year.

According to Evans-Pritchard, “the March data are likely to be even worse.”

“Admittedly, the high-frequency data we track show that economic activity has started to recover gradually in recent weeks,” he said. “But the slump in February was diluted in the data by being averaged with January, when most of the disruption had yet to be felt.” EFE-EPA

jt/lds