China Restarts Economy

China’s budding economic recovery provides not only provides some relief to global manufacturing but also insight and guidance into a timeframe when the rest of the world’s economy will restart.

Real-time indicators show that China is re-starting its industrial complex…Clearly, the re-start is at an early stage, but things are gradually improving. — Sanford C. Bernstein analysis


Employees are returning to work and production lines restarting even Wuhan, the epicenter of the outbreak, is ending its lockdown soon. Car sales have probably bottomed.


Car Sales

Recently released data show that car sales have now increased week-on-week since the start of February.  Though the data represent a drop of 40% from a year earlier, it’s a big improvement from declines of as much as 96% last month, according to China Passenger Car Association.

Othe Indicators

Air carriers are slowly restoring flights as scheduled capacity rose 2.4% last week from the previous seven days to 9.2 million seats, while all the other top 10 markets in the world continued to decline.

Chinese subway traffic increased 21% last week, and online sales of large appliances rebounding in both volumes and average prices on a week-to-week basis.

Here’s a list from Bloomberg of some of the manufacturers ramping up activity in China:


Production at BMW AG’s Shenyang plants resumed on Feb. 17, and the German carmaker said it is confident the Chinese government will manage the crisis and defeat the epidemic. “We remain confident in the medium and long-term business outlook of our No. 1 market worldwide,” the company said in an emailed response to questions.

Fiat Chrysler

The company said its manufacturing operations in China have restarted production under the approval of the relevant regional and national governments. More than 90% of its dealers and 95% of staff at the joint venture with Guangzhou Automobile Group are back online, and “the overall manufacturing and commercial operations are gradually resuming business,” Fiat Chrysler said.


The U.S. carmaker said its Chinese plants resumed production on Feb. 10 and are continuing to ramp up. Both its local joint ventures have achieved almost 100% recovery, though some Hubei or Wuhan employees are still under travel restrictions.


Foxconn, an important manufacturing partner to global names from Apple Inc. to HP Inc., is steadily getting back on its feet. Foxconn unit Hon Hai Precision Industry Co. said this week it’s back at full seasonal staffing earlier than anticipated, suggesting the Taiwanese company is confident of resolving the labor shortages and logistical hiccups that threatened to smother the flow of iPhones and gadgets to America and the rest of the world.


The Japanese carmaker said capacity is gradually recovering at its two Chinese ventures and so far they haven’t had problems caused by parts shortage there due to strain in supply from outside of China.


All Nissan Motor Co. factories in China have resumed work and production is set to align with government mandates, the company said.


All SAIC Motor Corp. plants in China have resumed production, with the company adjusting output levels based on demand. The carmaker has contingency plans to secure parts in case of any disruptions, it said.


Tesla Inc.’s factory in China has recovered from a virus-related shutdown better than many in the industry, helped by aid from local authorities. After resuming operations on Feb. 10, the plant — Tesla’s only outside the U.S. — has surpassed the capacity it had before the shutdown, reaching a weekly production of 3,000 cars, a company representative said Friday.


The Japanese auto giant’s plants in Guangzhou and Changchun have returned to their regular two-shift schedule, while in Tianjin, all production lines are back to two-shift arrangements except one that remains at one shift. The Chengdu plant is sticking to its usual one shift. More than 98% of Toyota’s dealerships are open again, and the company has no plans as of now to adjust its 2020 China sales target, it said.


Almost all production sites are back to operational, Volkswagen AG said. Challenges include a slow national supply chain and logistics ramp-up, as well as limited travel options for employees. All of Volkswagen and its partners’ component production sites are producing again, it said. The company is adjusting its output levels based on current conditions, such as by moving to one shift instead of two previously, according to the German company.

Source:  Bloomberg