Is China’s industrial production gradually coming back?

China’s Purchasing Managers’ Indices (PMIs) are published for February, and they show the dramatic nature of the economic contraction in that month. The manufacturing PMI was at 35.7 where below 50 is contraction; the non-manufacturing or “services PMI” was even far lower at 28.9. The first looks like October 2008 right after the global financial crash; the second, for services, is far below what it was then. Hard data for electricity generation through Feb. 27, 33 days after Chinese New Year, show coal consumption by electric power plants still at 420,000 tons/day, compared to 650,000 for recent years — approximately 40% below normal.

But industrial production is reviving, as these PMIs indicate more quickly than consumption. Xinhua’s March 1 feature “Insight From Space: China’s Economy is Heating Up,” graphically presents hard satellite evidence of this. Infrared satellite images are made into red-dot displays of “average temperature of the whole region, which usually stems from … industrial or energy production, or high-density production and living activities.” For various key regions, an image from Jan. 19-21 is compared to one from Feb. 20-22.

The Jinshan district southwest of Shanghai (north of Hangzhou Bay) shows the Jinshan Industrial Park, the Shanghai Chemical Industry Park, and Downtown Jinshan noticeably coming to industrial life. “The Shanghai Chemical Industry Park (SCIP) based in Jinshan District,” says the text, “is a state-level economic and technological development zone, and also one of the largest petrochemical bases in Asia. As of now, nearly all of the enterprises in the zone have resumed production. Moreover, by Feb. 24, 347 of 414 production-oriented enterprises in Jinshan Industry Park had returned to work.”

Likewise, Xinhua shows satellite images of Ma Steel, the state-owned iron and steel giant, which is located in the city of Ma’anshan, in east China’s Anhui Province. It is the largest industrial enterprise in Anhui. The images were taken Jan. 19, 2020, and on Feb. 20, 2020, and the density of thermal infrared points has increased many times over by Feb. 20. Xinhua reports that, “as of Feb. 25, 92% of major industrial enterprises in Anhui Province had resumed production, with more than 1.5 million employees returning to work.”

Further on in the article, Xinhua has a computer generated map showing the work resumption rate for major industrial enterprises in all the provinces in China. Those provinces which have attained 80-100% work resumption include: Guangdong, Hunan, Fujian, Jiangxi, Zhejiang, Anhui, Jiangsu, Shandong, Shanxi, Hebei, Liaoning, and Sichuan. Those having attained a 70-80% work resumption rate of major industrial enterprises are: Yunnan, Guizhou, and Shanghai Shi.

The repeated word “major” must be stressed. Small and medium-sized firms generally are reported still closed.

In the meantime, leading Chinese Machinery Manufacturer, Xuzhou Construction Machinery Group was able to finish overseas deliveries in spite of difficulties resulting from the novel Coronavirus Outbreak, according to the Belt and Road News.

The company said that its goods, such as cranes, loaders and excavators was transported for offshore shipping to Countries on the Belt & Road.

General Manager of XCMG Import & Export Company, Liu Jansen said that “We have coordinated our entire supply chain to ensure production across all factories.

So far, there have been no delays in the delivery of orders since the outbreak of the coronavirus”.

The company has supported a total of 265 manufacturing and logistics firms in its supply chain in Xuzhou City in Jiangsu Province, the headquarters of the company to continue production, which contributes to more than 90 percent of the major suppliers for the company.

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