SINGAPORE (ICIS)--While major world economies are still struggling with the coronavirus pandemic that has bruised their economies, China is on the fast lane to recovery, supported by Beijing’s stimulus measures.
China wasted no time in whipping its economy back to shape following the outbreak of the deadly virus which was detected late last year in the city of Wuhan, with infrastructure and construction amongst its priorities.
China reported 14 new coronavirus cases on 26 September, compared with 15 cases announced a day earlier, the latest data from the national health authority showed.
The total number of confirmed coronavirus infections in China stood at 85,351, while the number of total deaths remained unchanged at 4,634.
The world’s second-largest economy after the US targets to expand its railway length to around 200,000 km before 2035, including some 70,000 km of high-speed lines, according to the China State Railway Group.
That represents around 33% increase from the total length of approximately 141,400 km the country currently has. High-speed lines stand at around 30,000 km at present.
China's construction activity also picked up following the reopening of the economy in the second quarter after restrictions to contain the coronavirus outbreak were lifted.
The country’s investment in real estate development in the first eight months reached yuan (CNY) 8.8tn ($1.3tn), up by 4.6% year on year and higher than the 3.4% increase in the January-July period, based on data from the National Bureau of Statistics (NBS).
Investment in house construction in January-August rose by 5.3%, also faster than the 4.1% increase in January-July, the data showed.
Real estate developers’ house construction acreage increased by 3.3% year on year to 8.4bn square metres in January-August, also faster than the 3.0% growth in the first seven months.
In the plastics market geared towards construction usage among others, domestic Chinese maleic anhydride (MA) prices were bullish amid constraints for prompt supplies.
The local Chinese epoxy resins market remained stable following weeks of healthy buying previously.
With the Chinese automotive industry having staged a strong recovery in the third quarter and is expected to remain healthy in the fourth quarter of 2020, this will help to bolster demand for ethylene propylene diene monomer (EPDM) in China, the world's largest automotive market.
The upcoming anti-dumping duties on EPDM imports into China which are expected to be implemented by the end of this year, are expected to shore up import prices.
Demand for expandable polystyrene (EPS) will likely continue to remain strong and stable after the October holidays in China until early November.
End-user demand has been healthy since April 2020 from both the construction and packaging industries following the country's economic comeback following the pandemic.
A curtailment in supplies from some short-term unit shutdowns in north China and south China contributed further to the strong fundamentals for EPS, especially throughout Q3 2020.
All told, Q4 could bode well for China's growth, as signalled by recent healthy economic data, with output generated by the Chinese industrial firms rising by 5.6% year on year in August.
The growth in August quickened from the 4.8% registered in the previous month and was also the fastest pace of expansion this year, data from the National Bureau of Statistics (NBS) showed.
Of the 41 sectors covered in the survey, 29 reported growth in output, led by electric machine manufacturing (15.1%), car manufacturing (14.8%) and general machine manufacturing (10.9%).
Output of chemical raw material and finished product manufacturers grew by 6.9% year on year in August.
Industrial output in the first eight months expanded by 0.4% year on year, reversing the 0.4% decrease in January-July period.
In addition, China has launched a one-month consumption promotion from 9 September to 8 October as a new stimulus measure to the pandemic-hit economy and that will help to spur demand for many petrochemicals.
In what is known as the Consumption Promotion Month, themed “Enjoy Spending, Live Well”, 179 cities are holding over 2,800 activities to echo the initiative.
More than 100,000 enterprises, 2m physical and online stores will participate in the “1+N” series of consumer promotion events, which include online-offline deep integration, simultaneous promotion of goods and services, and integration of business, travel, culture, tourism and entertainment.
Additional reporting by Fanny Zhang, Helen Yan, Ai Teng Lim and Trixie Yap
Photo: Receptionist wearing a face mask to help curb the spread of the coronavirus attends a visitor at the Auto China 2020 show in Beijing. (Andy Wong/AP/Shutterstock)
Insight article by Felicia Loo and Fanny Zhang