Coronavirus: China says over 90 per cent of state firms back in business after manufacturing index hits all-time low

The 48,000 subsidiaries under the 96 central government-owned firms supervised by the oversight agency have reported a 91.7 per cent work resumption rate

In contrast, small and medium-sized businesses continue to struggle to get back to work following the various quarantine and work-from-home policies

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State enterprises have largely resumed production after the pause caused by the coronavirus, China says. Photo: Xinhua

Published: 7:00pm, 1 Mar 2020Updated: 10:21am, 2 Mar 2020

Over 90 per cent of China’s state-owned enterprises have resumed production, according to the state assets oversight agency, after fears over the economic impact of the coronavirus escalated with the announcement of economic data for February that was much weaker than expected.

The 48,000 subsidiaries under the 96 central government-owned firms supervised by the oversight agency have reported a 91.7 per cent work resumption rate, following the quarantine and work-from-home policies announced across the country in the past five weeks to contain the spread of the novel coronavirus.

“In particular, oil and gas, communications, electricity generation, transportation industries have [an operation rate of] over 95 per cent; some have achieved a 100 per cent rate,” an official WeChat account run by the State-owned Assets Supervision and Administration Commission said on Saturday, citing a report by state broadcaster CCTV.

Economic production has been sharply curtailed since late January, when Beijing extended the Lunar New Year holiday for a week, with several provinces announcing further extensions until mid-February, prompted by the effects of the coronavirus outbreak, which had caused more than 79,000 infections and over 2,800 deaths in mainland China as of Sunday.

While the state-owned enterprises (SOEs) appear to have been successful at returning to business-as-usual, other official metrics for the virus-stricken Chinese economy were not as optimistic.

On Saturday, China announced that its February manufacturing purchasing managers’ index (PMI) had slowed to an all-time low of 35.7, signalling a sharp contraction in factory activity. This was also a level worse than the previous low reached during the global financial crisis in November 2008, when PMI dropped to 38.8.

The National Bureau of Statistics (NBS) also said China’s non-manufacturing PMI – a gauge of sentiment in the services and construction sectors – had dropped, to 29.6 from 54.1 in January. This was also the lowest on record, below the previous low of 49.7 in November 2011, according to the NBS.

In addition, the deputy minister of the Ministry of Industry and Information Technology, Zhang Kejian, said on Wednesday that only 30 per cent of China’s small and medium-sized enterprises (SMEs) had resumed work – a rate much lower than for state enterprises.