May 7, 2020

News in Charts: Eyes on China for signs of what lies ahead

by Fathom Consulting.

China was the first country to be affected by COVID-19. Having contained the virus domestically, its economic trajectory should offer clues about what will happen in other countries. After rising sharply in February, daily new cases have now fallen to very low levels. And strict social distancing measures have been reduced. The University of Oxford produces an index that measures how stringent different government policies to contain COVID-19 have been. It is scaled from 0 to 100, with a higher score consistent with more stringent measures. According to this, China’s level of stringency at the beginning of May was 62, marking a small drop from its peak of 71 in March.

Refresh the chart in your browser | Edit the chart in Datastream

The impact of social distancing measures on economic activity was clear in first quarter’s GDP data, which showed a record quarterly decline. As some of these measures were lifted, there have been signs of recovery. The official NBS PMI surveys are consistent with a recovery, with both measures slightly above 50, which is the threshold that separates contraction from expansion. However, they are both only a little bit above 50, implying that just a small number of firms have seen activity increase relative to an extremely weak March. Nonetheless, they suggest that the domestic picture is improving, albeit from very low levels.

Refresh the chart in your browser | Edit the chart in Datastream

Want more charts and analysis? Access a pre-built library of charts built by Fathom Consulting via Datastream Chartbook in Eikon.

Although foreign demand was cited as a constraint on growth in surveys, official trade data paint a more positive picture. The annual growth rate in exports was 3.5% in April on this measure, despite the severe restrictions in place across Europe and North America. That number was much higher than the consensus expectation in a Reuters poll (-15.7%). Meanwhile, imports were down 14.2% year-on-year, suggesting China was a drag on global demand. Looking forward, despite April’s surprisingly resilient figure, the risks to China’s exports appear skewed heavily to the downside. Whether domestic demand can offset that remains to be seen, and will offer some indication about the extent to which containment of the virus in one country can be consistent with economic recovery while the virus remains prevalent in other countries around the world.

Refresh the chart in your browser | Edit the chart in Datastream



Financial time series database which allows you to identify and examine trends, generate and test ideas and develop view points on the market.

Refinitiv offers the world’s most comprehensive historical database for numerical macroeconomic and cross-asset financial data which started in the 1950s and has grown into an indispensable resource for financial professionals. Find out more.

Article Keywords , ,

Get In Touch


We have updated our Privacy Statement. Before you continue, please read our new Privacy Statement and familiarize yourself with the terms.×