9○AcrossChina,factoriesthatproduceeverything
fromsmartphonestosneakershavebeendormant
sincetheLunarNewYearholidayinlateJanuaryas
thenationbattledtocontainthespreadofthenew
coronavirus.Nowplantsareslowlycomingback
online,proddedbyPresidentXiJinpingandother
topChineseleaderswhoworrythatanextended
shutdownwilljeopardizethegovernment’slofty
developmenttargetsfor2020.
Economistsaretrackingenergyconsumption,
poringoverpollutioncharts,andstudyingdata
ontrafficmovementstodiscernhowquicklythe
world’ssecond-largesteconomycangetbackto
business.BloombergEconomicshasestimatedthat
theeconomywasoperatingatasmuchas80%of
normalcapacityasofMarch6.
Millions of migrantworkers whowere left
strandedbyrestrictionsontravelimposedafter
thestartoftheJanuaryholidayarebeingallowed
backintothemegacities along China’s east coast.
They have to endure quarantines when they get
there, but back they are going. About 78 million
have returned to work, which is about 60% of those
who went home for the holiday, and almost all will
have returned by early April, the government said
in early March.
Given the extent of the virus controls, it will take
time to get that many people back on the job. At one
stage the cheap-and-cheerful long-distance buses
that ply China’s highways were allowed to travel only
half full as part of an effort to prevent contagion.
Economists have long suspected that China
fudges its statistics, and so they have become
accustomed to tracking proxies for economicHow quickly will China
bounce back?
activity,suchasenergyconsumption.Theuse
ofcoalburnedtogenerate electricity has been
steadilytickingupandisnowapproachingnor-
mallevelsforthistimeofyear.
But,asever,somearetryingtogamethesystem.
In Zhejiang, a province on the east coast that’s a
manufacturing powerhouse, at least three cities gave
factories targets for power consumption because
they’re using the data to show a resurgence in pro-
duction, according to people familiar with the mat-
ter. To comply, some plant managers turned on all
the lights and ran machinery as if they were operat-
ing at full capacity.
Just as China’s factories are beginning to get
back on their feet, they face a second blow: the
spread of the disease and the associated risk of a
collapse in economic activity in the major devel-
oped economies that are their main customers.● Can you trust the data?
Manufacturing companies across China told
Bloomberg News that the emerging challenge is
now demand, not supply. “We are actually more
worried about the development of the epidemic in
Europe and the U.S., which will affect their domes-
tic consumption,” says Mark Ma, owner of Seabay
International Freight Forwarding Ltd., a company
in Shenzhen. About a third of the goods it handles
are sold on Amazon, he says.
David Ni runs a company in Nanjing that buys
aluminum alloy car wheels from Chinese produc-
ers and exports them to retailers in the U.S. He
was planning to showcase his products at the◼ COVID-19 / ECONOMY Bloomberg Businessweek March 16, 2020What I’m
telling
investors
Karen Van Voorhis,
director of financial
planning, Daniel J. Galli
& Associates, Norwell,
Mass.
It’s human nature to live
and react in the here
and now. The challenge
is complicated by
the fact that the
solution to most of
people’s fears is to do
nothing. It feels like
an unsatisfying thing
to tell people. People
rarely remember that
not everything they
have is in the stock
market. I’ll say, “You’re
looking at what the
Dow is doing, but you’re
not only invested in
the Dow. You have
holdings in bonds and
international equities.
And you have cash—
remember how we put
that aside in a money
market fund?” This
is a double whammy,
because it’s not only a
market downturn but
it’s also a health scare.
It’s different than having
a trade war. The stress
level is higher because
there are legitimate
health concerns. �As
told to Annie MassaWhat happened to