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Chinese Economic Coronavirus Data Hints at Struggles for Small Businesses
New data show that manufacturing in China has decreased much more than expected, as the country battles the spread of the coronavirus.
Chinese officials are trying hard to get people back to work without causing another outbreak.
A private, independent survey of manufacturers published this week shows the largest decrease in China's manufacturing activity in 16 years. The survey is called the Caixin/Markit Manufacturing Purchasing Managers' Index, PMI. It gives an independent look at operating conditions in manufacturing.
It found manufacturing in the country fell last month to 40.3, the lowest reading since the survey began in April 2004. A PMI rating below 50 is a sign that the manufacturing economy is decreasing. Above 50 shows expansion.
China's National Bureau of Statistics released its latest data last Saturday. It showed the country’s economic activity decreased to a record low of 35.7 in February, down from 50.0 in January. It marks the lowest rating since January 2005, when the index began. The previous lowest was 38.8 in November 2008, during the international financial crisis.
Those surveys show just how much the coronavirus has affected the Chinese economy.
'Shocking' decreases
The decreases were not a surprise; the extended Lunar New Year holiday kept factories and offices closed because of the virus. However, the drops were sharper than expected.
"It is shocking," said Dr. Frank Xie, a business professor at the University of South Carolina Aiken. "It really shows how bad the situation is," he added.
Nicholas R. Lardy is an economist at the Brookings Institution and a Chinese economy expert. "I think the negative effect of the virus on China's economy is going to be much larger than some think," Lardy said. He said factories and businesses that had reopened are still operating at reduced levels and are facing production problems.
Small businesses struggle
While the coronavirus outbreak has affected some of the biggest companies in the world, it is also hurting small businesses in China.
Zhang Kejian is the deputy minister of the Ministry of Industry and Information Technology. He said last week that only 30 percent of China's small- and medium-sized businesses had returned to work.
China’s central government reported that 90 percent of state-owned companies have returned to work.
Small- and medium-sized businesses make up more than 60 percent of the country's Gross Domestic Product. They employ more than 80 percent of China's workers, government data from last September show.
The government has promised to offer financial support to small businesses affected by the outbreak.
Health crisis challenges
In recent days, China has reported fewer than 10 new confirmed coronavirus cases outside Hubei Province, where the outbreak began.
But the government is not ready to declare victory yet. Liang Wannian is a senior official with China's National Health Commission. He recently called the situation “grim.”
“We haven't stopped the (outbreak) in Wuhan yet," he added.
Many experts fear there will be new outbreaks when millions more people in China go back to work.
I’m Susan Shand.
VOA News reported this story. Susan Shand adapted it for VOA Learning English. Ashley Thompson was the editor.
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Words in This Story
outbreak – n. a sudden start or increase of fighting or disease
survey – n. an activity in which many people are asked a question or a series of questions in order to gather information about what most people do or think about something
index – n. a sign or number that shows how something is changing or performing
statistics – n. a number that represents a piece of information
Gross Domestic Product – n. the amount an economy earns
grim – adj. unpleasant or shocking to see
resurgence – n. a growth or increase that occurs after a period without growth or increase
reveal - v. to make (something) known
previous - adj. earlier in time or order
negative - adj. earlier in time or order