Infections are down, pollution is back. But China’s post-coronavirus economic recovery is a long way off

With a quarter of the world’s population still in lockdown and their economies at a standstill, China appears to be rebounding at speed. The worst, though, is yet to come, and investors should not expect business as usual any time soon

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Commuters walk to a metro station in Beijing on March 27. Businesses in China are starting to revert to a normal work routine after weeks of strict quarantine measures but the economy is not yet out of the woods. Photo: Reuters

Published: 1:00am, 3 Apr 2020Updated: 4:58am, 3 Apr 2020

One of the more telling smartphone memes that has been doing the rounds is the one that looked like a WhatsApp page that began by saying, “China created the group Covid-19”. The next message on the screen was, “China added You”. Then came, “China added the World”. The final punchline was, “China left”.

Most comedy is funny because of an element of truth running through the gag. China this week reported its purchasing managers’ index (PMI), a leading indicator of how the economy might perform.

It was a massive 52 in March, much higher than the expectation of 44.8, and comes on the back of a really shocking figure in February of 35.7. A figure of over 50 indicates that the economy is expanding, and this kind of expansion is way above anything that has been seen for a decade, even though we should expect a significant, if unsustainable, rebound.

Such a phoenix-like rise from the ashes is unsurprisingly going to engender a certain degree of irritation and jealousy elsewhere.

The global economy has been crippled in a way not seen since the Great Depression of the 1930s – with a severe halt in production in just a month. The stock market is extremely fragile, aware that potentially lethal damage is being done by the inactivity. Already, companies are falling like ninepins.