• 10. Juli 2020
  • 08:30
  • Economy

China's economy on its way back to normality

Economic experts assume that China's gross domestic product (GDP) has grown again in the second quarter of 2020. At this year's National People's Congress, the government has decided for the first time since 1990 not to set an economic growth target for the current year. In addition, a major economic stimulus plan was approved for companies and regions that were particularly affected. According to calculations by the international news agency Reuters, the listed measures add up to around 4.1 percent of the GDP.

While, according to reports from Germany Trade & Invest, the manufacturing industry has recovered quickly, the service sector has been faltering for a long time due to the lack of domestic demand. For four consecutive months now, both the Purchasing Managers Index (PMI) for the manufacturing sector (50.9 points in June) and that for the non-manufacturing sector (54.4 points in June) have developed positively after record lows of 35.7 and 29.6 points during the nationwide lockdown in February. Sales in the Chinese automotive industry have risen again in recent months as sellers offer discounts and comparatively low prices. In addition, car ownership has also gained popularity in the People's Republic as a result of the pandemic. According to the Chinese Automobile Industry Association, the industry's turnover in June was 337.6 billion renminbi (RMB), an increase of 3.5 percent compared to the previous year. However, overall sales in the first five months of 2020 were still 22.6 percent below the same period last year.

In July, a total of 45 blank sailings were announced by the carriers for liner services calling at Chinese ports, which is a reduction of approximately 25 percent compared to June. Container handling in all Chinese ports has grown by 0.57 percent in June compared to the previous year. Among the best results reported this month by Chinese seaports was the port of Guangzhou, achieving a record result for a single month with a throughput of more than two million TEUs (standard containers). In addition, two new international liner services were launched.

Pan Hua, Head of the Hamburg Liaison Office in Shanghai, reports that trade between Chinese ports and hinterland markets has shown better development than foreign trade. The corona pandemic has forced many manufacturers to sell goods originally intended for export on the domestic market.

Rail traffic between China and Europe continues to grow. According to official Chinese figures, 3953 trains transported approx. 355,000 TEU on the so-called New Silk Road in the first five months of this year. Provinces report that from January to May, most trains originated in Xi'an (1667 trains) and Chengdu (789 trains). However, all figures also include trains with Russia as their destination.

98 percent of the containers transported were loaded. In May alone the number of trains rose by 43 percent year-on-year to 1033 with a reported loading factor of 99.9 percent. This trend continued in June, resulting in bottlenecks at the Sino-Kazakh border crossings in Khorgos and Alashankou. Certain trains were even temporarily banned from loading at the two terminals, according to an urgent announcement by the Chinese railway authorities. However, trains commuting between the People's Republic of China, Europe and Central Asia are to be given priority in further handling processes. The congestions and delays will continue into July. New slots are therefore currently not being allocated by the responsible Chinese administration. Certain provincial governments such as those in Chengdu and Yiwu have been urged to reduce the frequencies of their rail connections. 

Delays are also currently occurring at the Sino-Mongolian border near Erenhot, after heavy rain had flooded tracks in several places.
 

Press contact

  • Bengt van Beuningen

    Bengt van Beuningen

    +49 40 37709 102
  • Etta Weiner

    Etta Weiner

    +49 40 37709 118
Loading