Economy Jul 17

China power, transport data confirm rebound

Statistics on transportation of freight and people, plus electricity consumption all point to an economy returning to normal

China power, transport data confirm rebound
Power generation in 25 provincial grids haa risen year-on-year, and jumped by more than 10% in Shanghai plus some provinces – Sichuan, Hunan, Jiangxi, Fujian, Zhejiang, Gansu and Chongqing. File photo by AFP.

(ATF) China has released figures showing an economic revival, and even rises in key areas. Freight has largely got back to normal growth levels, while electricity use has increased by 6.1% year-on-year and seen growth for three consecutive months. Plus, excavator sales jumped by over 60%, although that is partly due to the flood crisis.

The situation is expected to continue in the second half of the year, according to China Economic Daily. Passenger numbers on transport routes are still low – 43% less than this time last year.

According to the China Transportation Production Index (CTSI) released by the Ministry of Transport's Institute of Science and Technology on July 13, the CTSI was 153.9 points in June 2020, an 11.5% decrease on 2019 and a decrease of 5.0% from May. But the CTSI freight index was 185.2 points, up 5.0% year-on-year, and the growth rate was 4.2% higher than in May. The CTSI passenger index was 43 down year-on-year, but 6.1% less than in May.

Zhou Jian, deputy director of the research at the ministry's Information Centre for the Academy of Science and Technology, believed that as the impact of the epidemic drops and production and life recovers, the decline in the transportation index (CTSI) will narrow further. The freight index continued to maintain positive growth – 5% in June, which was significantly faster than the 0.8% in May, and basically the same as in 2019, indicating that overall freight volume has returned to a normal growth level. 

It showed that China’s economy has recovered, although it is unclear whether this is a bounce as the economy reopens, or is sign leading to a V-shaped recovery, he said.

Power generation & use up

Another key indicator – national electricity generation and consumption continues to improve. "Economic Reference News" reported that national average daily power generation in June was 20.861 billion kWh, an increase of 7.4% year-on-year and 9.5% month-on-month. Power generation in 25 provincial grids had risen year-on-year, and jumped by more than 10% in Shanghai plus some provinces – Sichuan, Hunan, Jiangxi, Fujian, Zhejiang, Gansu, Chongqing.

Data released by the National Energy Administration on July 13 showed total electricity consumption from January to June was 3,345.7 billion kWh, down only 1.3% on last year. And in June, it was 635 billion kwh, an increase of 6.1% on 2019, with growth for three consecutive months.

Economic Reference News noted that Fujian province had seen record electricity loads since mid-June and was 12.8% up year-on-year, as industrial power consumption had risen by a similar amount, while Zhejiang had seen year-on-year growth of 14%.

An analysis by the State Grid Energy Research Institute in July found that temperatures were expected to be significantly higher, as well as power consumption. Various domestic policies and measures have been implemented to promote a return of the economy to normal levels, but it has been severely affected by the epidemic overseas and the global economic situation. So China's economic stability and recovery would face challenges. It expected that nationwide electricity consumption for the month would rise by about 7% year-on-year.

ALSO SEE: Excavator sales surge 63% in June

Zheshang Securities said that with increased monetary easing, effective implementation of fiscal policy support, and a continuing resumption of production in the infrastructure sector, the demand for excavators would continue to strengthen toward the traditional peak season. Annual excavator sales are expected to reach 300,000 units, which would be 25% up on last year.