28/04/2020
BEIJING (Reuters) – China’s factory activity likely rose for a second straight month in April as more businesses re-opened from strict lockdowns implemented to contain the coronavirus outbreak, which has now paralysed the global economy.
The official manufacturing Purchasing Manager’s Index (PMI), due for release on Thursday, is forecast to fall to 51 in April, from 52 in March, according to the median forecast of 32 economists polled by Reuters. A reading above the 50-point mark indicates an expansion in activity.
While the forecast PMI would show a slight moderation in China’s factory activity growth, it would be a stark contrast to recent PMIs in other economies, which plummeted to previously unimaginable lows.
That global slump, caused by heavy government-ordered lockdowns, as well as the cautious resumption of business in China, suggests any recovery in the world’s second-largest economy is likely to be some way off.
“The recovery so far has been led by a bounce-back in production, however, the growth bottleneck has decisively shifted to the demand side, as global growth has weakened and consumption recovery has lagged amid continued social distancing,” Morgan Stanley said in a note.
“The expected slump in external demand has likely capped further recovery in industrial production.”
The latest official data showed 84% of mid-sized and small business had reopened as of April 15, compared with 71.7% on March 24.
Hobbled by the coronavirus, China’s economy shrank 6.8% in the first quarter from a year earlier, the first contraction since current quarterly records began.
That has left Chinese manufacturers with reduced export orders and a logistics logjam, as many exporters grapple with rising inventory, high costs and falling profits. Some have let workers go as part of the cost-cutting efforts.
A China-based brokerage Zhongtai Securities estimated that the country’s real unemployment rate, measured using international standards, could exceed 20%, equal to more than 70 million job losses and much higher than March’s official reading of 5.9%.
Sheng Laiyun, deputy head at the statistics bureau, said on Sunday migrant workers and college graduates are facing increasing pressures to secure jobs, while official jobless surveys show nearly 20% of employed workers not working in March.
Chinese authorities have rolled out more support to revive the economy. The People’s Bank of China earlier in April cut the amount of cash banks must hold as reserves and reduced the interest rate on lenders’ excess reserves.
Source: Reuters
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12/04/2020
- Between January 20 and April 4, PM2.5 levels across the country fell by more than 18 per cent, according to the environment ministry
- But observers say that as soon as the nation’s factories and roads get back to normal, so too will the air pollution levels
Blue skies were an unexpected upside of locking down cities and halting industrial production across China. Photo: AFP
China’s air quality has improved dramatically in recent weeks as a result of the widespread city lockdowns and strict travel restrictions introduced to contain the
. But experts say the blue skies could rapidly disappear as factories and roads reopen under a government stimulus plan to breathe new life into a stalled economy.
According to the Ministry of Ecology and Environment, between January 20 and April 4 the average concentration of PM2.5 – the tiny particles that pose the biggest risk to health – fell by 18.4 per cent from the same period of last year.
Meanwhile, the average number of days with good air quality – determined as when the air pollution index falls below 100 – rose by 7.5 per cent, it said.
Satellite images released by Nasa and the European Space Agency showed a dramatic drop in nitrogen dioxide emissions in major Chinese cities in the first two months of 2020, compared with a year earlier.
According to Nasa, the changes in Wuhan – the central China city at the epicentre of the initial coronavirus outbreak – were particularly striking, while nitrogen dioxide levels across the whole of eastern and central China were 10 to 30 per cent lower than normal.
The region is home to hundreds of factories, supplying everything from steel and car parts to microchips. Wuhan, which has a population of 11 million, was placed under lockdown on January 23, but those
restrictions were lifted on Wednesday
.
Air pollution is likely to return to China’s cities once the lockdowns are lifted. Photo: Reuters
Nitrogen dioxide is produced by cars, power plants and other industrial facilities and is thought to exacerbate respiratory illnesses such as asthma.
The space agency said the decline in air pollution levels coincided with the restrictions imposed on transport and business activities.
That was consistent with official data from China’s National Development and Reform Commission, which recorded a 25 per cent fall in road freight volume and a 14 per cent decline in the consumption of oil products between January and February.
Guangzhou cases prompt shutdown in ‘Little Africa’ trading hub
Liu Qian, a senior climate campaigner for Greenpeace based in Beijing, said the restrictions on industry and travel were the primary reasons for the improvement in air quality.
According to official data, in February, the concentrations of PM2.5, nitrogen dioxide and sulphur dioxide – a toxic gas that comes mostly from industrial burning of coal and other fossil fuels – all fell, by 27 per cent, 28 per cent and 23 per cent, respectively.
“The causes of air pollution are complicated, but the suspension of industrial activity and a drop in public transport use will have helped to reduce levels,” Liu said.
As the epicentre of the Covid-19 pandemic has shifted to the
United States and
, human and industrial activity in China is gradually picking back up, and so is air pollution.
Lauri Myllyvirta, lead analyst with the Centre for Research on Energy and Clean Air in Helsinki, said that levels of nitrogen dioxide pollution, measured both by Nasa satellites and official stations in China, started inching back up in the middle of March and had returned to normal levels by the end of the month.
That coincided with the centre’s findings – published on Carbon Brief, a British website on climate change – that coal consumption at power plants and oil refineries across China returned to their normal levels in the fourth week of March.
How the Wuhan experience could help coronavirus battle in US and Europe
Ma Jun, director of the Institute of Public & Environmental Affairs, a Beijing-based charity, said a stimulus plan to kick-start the economy would have a significant impact on air pollution.
“Once industrial production is fully resumed, so are the emission levels,” he said. “Unless another outbreak happens and triggers another lockdown, which would be terrible, the improvement achieved under the pandemic is unstable and won’t last long.”
After the 2008 financial crisis, Beijing launched a 4 trillion yuan (US$567.6 billion) stimulus package that included massive infrastructure investment, but also did huge damage to the environment. In the years that followed, air pollution rose to record highs and sparked a public backlash.
Even before the
Covid-19 outbreak, China’s economy was slowing – it grew by 6.1 per cent in 2019, its slowest for 29 years – and concerns are now growing that policymakers will go all out to revive it.
“Local governments have been under huge pressure since last year, and there are fears that environmental regulations will be sidelined [in the push to boost economic output],” Ma said.
But Beijing had the opportunity to get it right this time by investing more in green infrastructure projects rather than high-carbon projects, he said.
“A balance between economic development and environmental protection is key to achieving a green recovery, and that is what China needs.”
Source: SCMP
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