China won't reach pre-pandemic conditions for a few months, despite strong pandemic recovery throughout most of 2020
- Despite making strides in pandemic recovery throughout the last few months, China's business leaders don't anticipate a full bounce-back until March 2021.
- But the US can still look to it for its own path to recovery.
- Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Payments & Commerce industry with the Payments & Commerce Briefing. You can learn more about subscribing here.
Nearly two-thirds of business leaders in China don't expect sales, profitability, and hiring to return to pre-pandemic levels until around March 2021, according to a recent report by China Beige Book cited by CNBC.
It's worth noting that China's economic recovery far outpaces that of other countries, likely because of differences in pandemic measures and government funding. The report cited a quarterly slowdown in sales growth in Q4 for sectors like luxury goods, food, and apparel while other industries like telecommunications, shipping, and financial services drove up overall economic growth in the same period.
China has been progressing toward full pandemic recovery, putting the country's retail sector on track for a resurgence as well. China's economy began opening back up in April after weeks of lockdown, just as most other parts of the world were in the throes of the coronavirus pandemic.
After retail sales in China declined 15.8% year over year (YoY) in March, they saw some improvement in April with only a 7.5% monthly decline. In August, retail sales finally rebounded into positive growth, seeing a 0.5% YoY increase. And in November, retail sales were up 5% YoY. One bright spot for the country was the substantial rise in ecommerce throughout the pandemic: Ecommerce sales are projected to have grown 27.5% YoY in China in 2020 as more consumers leaned on online channels to complete their purchases—a trend reflected in US ecommerce sales, which grew 32.4% YoY in 2020 according to eMarketer forecasts.
Despite key differences, China's pandemic recovery and subsequent improvement of key sectors could provide some insight for the US' route to recovery. China took sweeping measures to control the spread of the novel coronavirus: In February, it put the majority of its 1.4 billion residents under lockdown, enforcing strict curfews and requiring residents of most regions to wear masks in outdoor settings—a considerable difference from the US, which has taken a more lenient and fragmentary approach to recovery.
However, President-elect Joe Biden, who's entering office in a few weeks, is promising to take stricter measures to curb the spread of the virus. These tighter measures, coupled with the ongoing distribution of the coronavirus vaccine in the US, could lead to a quicker pandemic recovery. As it stands, the US economy is operating at 82% of where it was in early March, at the onset of the crisis, according to CNN's Back-to-Normal Index—an indication that US recovery is not out of arm's reach.
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