Workers sort parcels at an SF Express warehouse in East China's Anhui Province on Friday. Due to online sales and shopping festivals on Chinese e-commerce platforms, delivery volume hit an all-time high in recent days. Photo: cnsphoto

Although the coronavirus-battered global economy is not out of the woods yet, encouraging signs from China have raised hopes that a broad recovery is on the horizon.

Rebounds in the industrial sector have been gaining momentum on the ground. The automobile market, hard hit globally by the pandemic, has seen a smooth recovery in post-lockdown China, with sales hitting 2.19 million units in May, up 14.5 percent from the same period last year.

Manufacturers in the auto industry have benefited from this recovery. Florent Menegaux, CEO of Michelin Group, the French tire manufacturer, told Xinhua in a recent interview that Michelin's three Chinese factories have all resumed production and Michelin's business performance in China is expected to meet its June projections.

As China's passenger transport and logistics sectors rebounded with the gradual resumption of business activities, the oil market is also on track to recover.

Jim Burkhard, vice president and head of oil markets at IHS Markit, a London-based global information provider, took "the brisk resumption of Chinese oil demand" as "a welcome signpost for the global economy."

"When you consider that oil demand in China - the first country impacted by the virus - had fallen by more than 40 percent in February - the degree to which it is snapping back offers reason for some optimism about economic and demand recovery trends in other markets such as Europe and North America," he said in an online note.

Wood Mackenzie, a global energy consultancy group, projected that by the third quarter China's gasoline demand would have reached 3.5 million barrels per day, surpassing the same period last year by 3 percent. Meanwhile, diesel demand would likely grow by 1.2 percent to 3.4 million barrels per day over the same period.

By the end of April all major steel-using industries in China had returned to near-full production levels and the rebound in steel demand will be more visible in the second half of 2020 driven by construction, especially infrastructure investment, the World Steel Association said.

Foreshadowing a construction boom in China, the country's excavator producers reported robust sales in May, as China's 25 leading excavator makers sold a total of 31,744 excavators, up 68 percent year on year.

From a broader perspective, official data showed activities from China's factories continued to pick up in May with the value-added industrial output, a key economic indicator, rising by 4.4 percent year on year.

Digital boost 

As the COVID-19 pandemic warrants the use of contactless and efficient business models such as virtual offices, online education and telehealth, digital transformation has become another useful measure in tracking how economies recover.

Standing at the forefront of digital infrastructure growth, China is expected to lead the digital economy and inject fresh impetus into global recovery.

China's three major telecom operators - China Mobile, China Unicom and China Telecom - plan to build more than 550,000 new 5G base stations this year, bringing the total number across the country to 600,000.

These 5G stations will enable uninterrupted outdoor connectivity in prefecture-level cities across China and cover key areas in counties and townships, according to the China Academy of Information and Communications Technology (CAICT), a government think tank.

Boosted by a solid industrial foundation and evolving commercial products, China's 5G industry is expected to create more than 3 million jobs by 2025, with 5G-induced aggregate information consumption surpassing 8.3 trillion yuan (about $1.17 trillion), a CAICT report noted.

Lim Jock Hoi, the ASEAN secretary-general, said China is a valuable partner of ASEAN in promoting the development of the digital economy in the region, noting that by 2025, ASEAN's digital economy is expected to grow from 1.3 percent of GDP in 2015 to 8.5 percent.

Strong consumption demand

The growing optimism around China's economic recovery is also supported by rising consumption in the domestic market.

During a mid-year online shopping bonanza initiated by Chinese e-commerce giants from June 1 to June 18, sales on Chinese shopping platforms JD.com and TMall.com both shattered previous records. Combined sales across the two popular platforms came close to a whopping 1 trillion yuan. Imported products also saw robust sales.

Noting that China's economy has good momentum overall, Zhang Liqing, chief economist of PwC China, said it is important to keep a clear head, as the risk of imported cases of COVID-19 infections still looms.

Apart from continued attention to traditional indicators, such as fixed-asset investment or imports and exports, global investors are expected to closely watch government spending and progress in new infrastructure, new urbanization initiatives and major projects when they gauge the health of the Chinese economy, as well as the risk of local government debt, he noted.

"China looks like it could be the biggest engine of global GDP growth in 2020 and maybe 2021," Craig Allen, the president of the US-China Business Council, was quoted as saying on Sunday by The Wall Street Journal.

Xinhua - Global Times
Newspaper headline: Rebound on the horizon