By Jeff Reynolds
As the Wuhan coronavirus continues to spread, stay at home orders have shut down commerce in many parts of the world. Some have predicted a 40% contraction in the U.S. economy in the 2nd quarter of 2020. This means that China’s economy, heavily dependent upon exports, will see no economic rebound for quite some time. In the mean time, the Trump administration has “turbocharged” its effort to relocate global supply chains from China to markets less hostile to the West.
The Epoch Times reports that China’s manufacturing industries have completely imploded:
Chinese factories are ramping up production as the country struggles to get back on its feet from the pandemic-induced recession. Around 80 percent of the small and medium-sized businesses, and nearly all large firms have returned to work, according to China’s commerce authorities. But analyses of recent data from the country suggests a quick rebound is nowhere in sight.
Export orders, including to China’s top export markets of the United States and Europe, have shriveled up as the virus shatters the world economy and workforces continue to shrink, and companies are uncertain about the outlook ahead.
The China Beige Book, a project to collect data on commercial activity in China, says that reopening the nation’s factories has come in fits and starts:
The good news is that almost all — 91% — of the more than 500 Chinese companies surveyed had reopened by late April, and about three-quarters were working on-site again, but just 42% were able to operate at more than half their capacity.
Worse, demand for goods and services from Chinese companies has plummeted. Foreign orders have fallen more than twice as fast as domestic ones, with orders from the U.S. contracting the most among China’s major trading partners.
Crucially, 81% of executives at surveyed companies said they’re worried about a resurgence of the coronavirus in the next three months. And 69% say April’s tepid pace of economic activity may be “as good as it gets” for the next several months.