The Industrial Capacity Recovery Index, based on satellite imagery and artificial intelligence, is a good indicator of China’s economic recovery, which continues to develop positively. Compared to the situation before the corona crisis, the level has now reached 80%.

Figure 1. Industrial Capacity Recovery Index measures satellite activity in industrial areas of China. Index level 100 represents the pre-coronavirus economic activity level. Source: China Merchant Bank

The IMF’s forecast for China’s GDP development published last week shows growth of 1.2% this year and 9.2% next year. While the figures seem encouraging, the situation in China can still be described as a tentative recovery. After unlocking, consumers have returned to the stores, but consumption remains cautious. It will take some time before consumer demand reaches pre-crisis levels and growth trajectories. The luxury goods trade already seems to have recovered, and there are also growing signs of recovery in the Chinese car market – the biggest in the world – that it could reach last year’s level in early summer.

Chinese import figures in March were only 0.9% lower than a year ago, as they were boosted by post-closure pent-up demand and the clearance of import inventories. However, in its export figures for March, China was 6.6% lower than in the previous year. China faces the same problems with other countries as export markets struggle with the corona virus.

Unlike the United States, Japan and Europe, China has so far not spent large sums on recovery stimulus during the corona crisis. The Chinese government has mainly supported companies with loans from its own banks to enable companies to pay salaries and purchase bills. Compared to its huge investments during the financial crisis, China is clearly still in a pending position in the management of the corona crisis. However, recent statements by well-known Chinese economists anticipate that the state will consider strengthening consumer demand with time-limited vouchers. Huge investments in infrastructure development during the financial crisis are unlikely this time around. As a result of political guidance, the Chinese economy has, over the past decade, shifted strongly from an investment- and export-driven economic model to a more domestic consumer demand- and technology-driven economic model.

The exports of Finnish companies to China, as well as the operations of several Finnish companies in China, are related to capital goods, the demand for which will strengthen with a small delay after the growth in demand for consumer goods. However, China offers soon good growth opportunities for Finnish companies as the Western export markets continue struggling with the corona crisis.

The tentative recovery of the Chinese economy after the corona crisis gives an encouraging example for other countries. Another encouraging message comes from the gradual normalization of Chinese everyday life. In many Western countries, the protection measures required by the corona crisis have progressed too late and often through fear, the fast spread of corona infections has come as a surprise to decision-makers. Fear has been necessary to ensure a sufficiently rapid and effective response. In the same way, when dismantling safeguards, care must be taken to turn fear into sensible precaution. The best medicine for this is having concrete examples of a successful return to normal life elsewhere.

The development of Shanghai Metro passenger numbers before and after the corona crisis is a good illustration of the return to normal life. Compared to the pre-crisis situation, the number of people using the metro has risen from 10% in the crisis phase to 60%. Reaching normal levels is probably about a month away.

Figure 2. Shanghai´s daily metro passenger figures until mid-April of each year, million passengers. Source: Shanghai Metro

City centers again look bustling, roads are filled with cars, sidewalks with pedestrians, and parks have a lot of seniors working out. In cafes and restaurants, corona is still visible as a safety gap between the tables and with seating arrangement in the same direction, not opposite. Team sports are still forbidden, although the opening of the Chinese Basketball League is already eagerly awaited. Last week, the opening of the CBA season was postponed to July. In addition to security assurances, the decision was also influenced by the challenges of getting the foreign reinforcements into China from their own home countries.

People living in China think that life already seems pretty normal, even though corona protection measures will be visible in everyday life for some time to come. The Chinese are also waiting for us coming back.


Korkia opens up China’s growth market for Nordic companies seeking to establish themselves permanently in Asia and generate profitable and sustainable business through their local operations. Asia Gateway builds on China’s and Finland’s growing economic ties and leverages extensive local knowledge and contacts from Korkia’s partners, Jiuyou, a Chinese fund and development company, and Asia Perspective, a consulting firm operating in China.