The COVID-19 pandemic has now spread across the globe, causing significant economic disruption all over the world. China was the first and one of the hardest-hit countries in this global fight. The city of Wuhan, the first epicenter of this pandemic, with a population of 11 million, was completely shut down on Jan. 23, 2020, which WHO called “unprecedented in public health history”. Soon after that, cities in Hubei, of which Wuhan is the capital city, together with the rest of China, imposed similar lockdown restrictions, albeit less restrictive. Due to these quarantine regulations, by late February officially reported new cases of coronavirus had turned zero outside Hubei; in mid-March, total officially reported new domestic cases in mainland China turned to zero.
This fight, however, comes with substantial economic costs: businesses had to shut down, transportation scaled down, workers and consumers stuck at home and so on. With the spread of coronavirus under control, restrictions on businesses were gradually lifted throughout March.
In this report, I use the newly available data to investigate how the COVID-19 outbreak and the associated quarantine policies have affected the Chinese economy from various perspectives. Specifically, I look at the 8 groups of economic indicators covering production, investment, consumption/sales and imports and exports. Almost all of them indicate a plummet in economic activity where the year-over-year growth rate dropped from about 10% before the pandemic to -20% or lower in February 2020. Fortunately, the limited amount of data available for March indicates a rebound in economic activity, which suggests that the negative impact may be short-lived.