Containers and trucks in Qingdao port, China, on February 14, 2019.
Reuters
BEIJING – China has not fully recovered from the shock of the coronavirus pandemic, business leaders said in a poll published by China Beige Book on Tuesday.
About a year after Covid-19 first appeared in the Chinese city of Wuhan, about two-thirds of executives surveyed by the third firm said they do not expect sales, profitability and employment to return to 2019 levels until at least three. after some months.
China Beige Book conducted more than 3,300 interviews between November 12 and December 11 in the most recent quarterly survey of its activity.
Credit concerns and trade tensions
For the fourth quarter, China Beige Book saw sharp declines in sales growth in luxury goods, food and clothing compared to the previous quarter.
“Firms in these subsectors have seen narrower margins as well as lower sales volumes and increased employment,” the report said.
This was in contrast to the better performance of furniture and home appliance dealers and sellers, indicating that richer households could increase overall consumption by spending on high-ticket items, Beige Book said.
Lenders were also more concerned with retail business. While the loan rejection rate remained fairly constant in most sectors – around 10% to 20% – that of the retail industry rose to 38% in the fourth quarter, the report said.
Domestic demand is an essential part of Beijing’s plan for sustainable economic growth in the coming years. China has tried to rely more on its own consumers for growth, rather than exports, especially amid rising tensions with major trading partners such as the US
China is still a bright spot, but it has a temporary outlook
In the services sector, China Beige Book also found that fourth-quarter earnings were not driven by consumers, but by industries that meet the needs of businesses such as telecommunications, shipping and financial services.
The restaurants with chains did not register such a big increase, while the trips did not register an increase, and the hospitality registered the lowest incomes, it is shown in the report.
The beige paper also pointed out that compared to the increase in exports, China’s imports have stalled from an initial recovery after the shock in the first quarter.
The Chinese market remains a bright spot for companies around the world, after the country managed to control the outbreak domestically and return to global growth by the second quarter.
But the scattered Covid-19 cases, most recently in the capital Beijing in the past two weeks, and the persistent spread of the virus abroad mean that the pandemic is an uncertainty for Chinese authorities and businesses.
China’s full-year economic data for 2020 is set to be released on January 18, according to the website of the National Bureau of Statistics.