FindingApr 27, 2020

Post-Lockdown Economic Recovery in China

The end of Wuhan's economic lockdown on April 8, 2020 saw a quick uptick in manufacturing but slower growth in services and among businesses.
Chart
Truck Flows Among Provincial Chinese Capital Cities

The Chinese government ended the 76-day lockdown of Wuhan on April 8, 2020. Outside Wuhan, many local governments had already eased restrictions on movement and shifted their focus to reviving the economy. In this work, the authors document the post-lockdown economic recovery in China.  The main findings are summarized as follows:

  • Official statistics suggest a quick recovery in manufacturing, which is corroborated in non-official data on city-to-city truck flows (see Figure 1) and air pollution emissions (see Figure 2).
  • Electricity consumption, retail sales and catering income suggest a much more persistent output decline in services. Business registration data also show less firm entry in services.
  • There is huge cross-region heterogeneity, with the southeast region experiencing the strongest initial recovery, according to the authors’ data.
  • Small businesses were hit hard, with February sales down 35% from 2019, and they grew slowly in March. April will be the key month to determine the recovery speed.