China's economy was the first to suffer the consequences of fighting the novel coronavirus and is the first on the road to recovery. After an initial cover-up and more than 3,000 deaths, China appears to have brought COVID-19 under control and laid the foundation for a gradual economic recovery, although normal activity levels may not be reached until 2021. If they can prevent a second wave of coronavirus cases and continue to support the small, privately owned firms that drive job creation, China's economy could put a floor under global growth and offer opportunities for investors.
All of us at Matthews Asia send our sympathies to everyone effected by COVID-19, either directly or indirectly, and we extend our gratitude to all health care professionals, scientists and service providers who are diligently working to help and provide care to those in need around the world.
Progress towards controlling COVID-19 is key
When thinking about prospects for the Chinese economy, one of the most important factors is whether the coronavirus remains under control.
At this point, China appears to have wrestled COVID-19 into submission. Over the 15-day period ending April 15, the average number of daily new cases was 52. In contrast, there was an average of 3,859 new daily cases during the 15 days ending February 15. (During the 15 days ending on April 15, there were an average of 30,275 new daily COVID-19 cases in the U.S., and 4,888 in the U.K.)
Moreover, during the most recent 15-day period, 91% of the new cases were attributed to Chinese nationals who traveled abroad, before returning to China and having been tested at their point of entry. Local transmission appears to be under control at this time.
The number of hospitalized patients with COVID-19 in China fell to 1,081 on April 16, down from a February 17 peak of 58,016. The recovery rate is now 95% nationwide, up from 15% two months ago.
China's progress in containing the virus gives hope to, and offers lessons for, the rest of the world. A study by a team of researchers from the U.K., U.S. and China found that the non-pharmaceutical interventions (NPIs) used in China were effective—especially early case detection by testing and contact reduction (social distancing). Without those measures, “the number of COVID-19 cases would likely have shown a 67-fold increase.”
The study also concluded that delays in implementing these NPIs were costly. “If NPIs could have been conducted one week, two weeks or three weeks earlier in China, cases could have been reduced by 66%, 86% and 95%, respectively, together with significantly reducing the number of affected areas."1