Getting China back to work
As China’s leadership works to kickstart the economy in the wake of the COVID-19 outbreak, the country’s provinces are hustling to get folks back to work. Trivium is tracking the official resumption rates throughout the country – to help folks understand what is happening on the ground.
Last update: June 03, 2020
Trivium National Business Activity Index
This index looks at the current state of China’s overall economic capacity utilization as compared with “normal” levels prior to the virus outbreak.
How we calculate it
We estimate the currently operating proportion of typical national output by aggregating our in-house resumption rate estimates for large and small enterprises, and weighting the two indices by their proportion in overall GDP (for more information see our notes below).
Trivium National Large Enterprise Activity Index
This index estimates current production levels at China’s large industrial and manufacturing enterprises as a proportion of normal activity levels.
How we calculate it
We produce our proprietary resumption index for large enterprises by tracking public reporting of provincial resumption rates, then adjusting for the weight of each province in national GDP and for estimated average capacity utilization rates among these enterprises.
Trivium National SME Activity Index
The Trivium National SME Activity Index estimates current production levels at China’s SMEs as a proportion of normal activity levels.
How we calculate it
We produce our proprietary index for SME resumption rates by cross-checking official SME resumption rates against our on-the-ground channel checks and anecdotal research, and adjusting for estimated average capacity utilization rates.
Resumption over time
Key takeaways as of June 3
- The vast majority of businesses in China have at least turned the lights back on – with 98.7% of large companies having resumed operations.
- 30 provinces are reporting full resumption rates (of between 99-100%) for large businesses. These provinces account for 95.4% of GDP. That said, capacity utilization at many of these companies is still closer to 90% of normal levels, with many far below that.
- Overall, then, industrial enterprises appear to be operating at 87.9% of normal activity levels, up from 85.3% exactly one month ago.
- SMEs are coming back to life. We estimate that small businesses are now operating at 87.8% of their normal activity. This is up from 86.5% two weeks ago.
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Breaking things down by province
- Provinces with 100% resumption rates, or right at that level, account for 95.4% of GDP.
- Only one laggard remains – Hubei.
|Province||Provincial GDP (% of national)||Reported resumption rate*||Contribution to national resumption rate|
Total national resumption rate for large enterprises: 98.7%
*Reported resumption rates, issued on an ad hoc basis, have been extrapolated to provide daily updates
- For the past several weeks, provincial governments have been publishing resumption rates for industrial enterprises with revenues of RMB 20 million a year and above.
- These numbers indicate the percentage of companies that have resumed operations since the Chinese New Year holiday. These numbers are reported irregularly and on an ad hoc basis, so we have collected them over time and extrapolated daily resumption rates based on the officially reported provincial numbers.
- We have weighted the calculated resumption rates by provincial shares of national GDP to aggregate our national resumption rate for industrial enterprises with revenues of over RMB 20 million.
- Given that the provincial resumption rates do not account for capacity utilization (i.e. a business is counted as “resumed” if it is operating at 33% of normal capacity) we have further adjusted the national resumption rate by taking estimated average capacity utilization for such enterprises (which is also reported in an ad hoc manner) into account to produce our National Large Enterprise Activity Index.
- In addition, the Ministry of Industry and Information Technology and the State Council have been publishing resumption rates for small and medium-sized enterprises on an occasional, ad hoc basis. We have taken these publicly reported rates and adjusted for anecdotal evidence we have gathered on SME operations as well as estimated average capacity utilization rates in order to calculate our National SME Activity Index.
- For our National Business Activity Index, we combined our large and small company indices, weighted by their proportion in GDP (40% for large companies and 60% for SMEs).