[CORONAVIRUS]
Getting China back to work
As China’s leadership struggled to kickstart the economy in the wake of the COVID-19 outbreak, the country’s provinces hustled to get folks back to work. Trivium tracked the official resumption rates throughout the country between February 15, 2020 and June 3, 2020 to paint a portrait of China’s economic re-ignition.
This index was based on COVID-related public data releases from provincial governments throughout China. As the economy has normalized, these releases have largely dried up, and this index was retired.
Post-COVID work resumption in China: Feb 15-June 3
Trivium National Business Activity Index: June 3, 2020
This index looked at the 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: June 3, 2020
This index estimated 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: June 3, 2020
The Trivium National SME Activity Index estimated 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.
Key takeaways as of June 3
- The vast majority of businesses in China had at least turned the lights back on – with 98.7% of large companies having resumed operations.
- 30 provinces were reporting full resumption rates (of between 99-100%) for large businesses. These provinces accounted for 95.4% of GDP. That said, capacity utilization at many of these companies was still closer to 90% of normal levels, with many far below that.
- Overall, then, industrial enterprises appeared to be operating at 87.9% of normal activity levels.
- SMEs were coming back to life. We estimated that small businesses were operating at 87.8% of their normal activity.
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Breaking things down by province
Key observations
- As of June 3, 2020, provinces with 100% resumption rates, or right at that level, accounted for 95.4% of GDP.
- Only one laggard remained – Hubei.
| Province | Provincial GDP (% of national) | Reported resumption rate* | Contribution to national resumption rate |
|---|---|---|---|
| Guangdong | 10.9% | 100% | 10.9% |
| Jiangsu | 10.1% | 100% | 10.1% |
| Shandong | 7.2% | 100% | 7.2% |
| Zhejiang | 6.3% | 100% | 6.3% |
| Henan | 5.5% | 100% | 5.5% |
| Sichuan | 4.7% | 99.7% | 4.7% |
| Hubei | 4.6% | 88.5% | 4.1% |
| Fujian | 4.3% | 99.6% | 4.3% |
| Hunan | 4.0% | 99.7% | 4% |
| Shanghai | 3.9% | 99.5% | 3.8% |
| Anhui | 3.7% | 99.6% | 3.7% |
| Beijing | 3.6% | 99.9% | 3.6% |
| Hebei | 3.5% | 99.6% | 3.5% |
| Shaanxi | 2.6% | 99.9% | 2.6% |
| Liaoning | 2.5% | 99.7% | 2.5% |
| Jiangxi | 2.5% | 99.8% | 2.5% |
| Chongqing | 2.4% | 100% | 2.4% |
| Yunnan | 2.3% | 99.5% | 2.3% |
| Guangxi | 2.1% | 100% | 2.1% |
| Inner Mongolia | 1.7% | 99.5% | 1.7% |
| Shanxi | 1.7% | 99.6% | 1.7% |
| Guizhou | 1.7% | 100% | 1.7% |
| Tianjin | 1.4% | 99.7% | 1.4% |
| Heilongjiang | 1.4% | 99.7% | 1.4% |
| Xinjiang | 1.4% | 99.8% | 1.4% |
| Jilin | 1.2% | 99.5% | 1.2% |
| Gansu | 0.9% | 99.5% | 0.9% |
| Hainan | 0.9% | 99.5% | 0.5% |
| Ningxia | 0.4% | 99.7% | 0.4% |
| Qinghai | 0.3% | 99.7% | 0.3% |
| Tibet | 0.2% | 99.8% | 0.2% |
Total national resumption rate for large enterprises as of June 3, 2020: 98.7%
*Reported resumption rates, issued on an ad hoc basis, have been extrapolated to provide daily updates
How we calculated
- During the peak of the COVID crisis in China, provincial governments published resumption rates for industrial enterprises with revenues of RMB 20 million a year and above.
- These numbers indicated the percentage of companies that have resumed operations since the Chinese New Year holiday. These numbers were reported irregularly and on an ad hoc basis, so we collected them over time and extrapolated daily resumption rates based on the officially reported provincial numbers.
- We 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 did not account for capacity utilization (i.e. a business is counted as “resumed” if it is operating at 33% of normal capacity) we 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 published resumption rates for small and medium-sized enterprises on an occasional, ad hoc basis. We took these publicly reported rates and adjusted for anecdotal evidence we 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).