The Chinese economy is still months away from a full recovery, according to a company survey

BEIJING – China has not yet fully recovered from the shock of the coronavirus pandemic, company leaders said in an investigation of the China Beige Book released Tuesday.

After about a year since Covid-19 first emerged in the Chinese city of Wuhan, about two-thirds of executives surveyed by the outside firm said they don’t expect sales, profitability and hiring to return to at least three years. the level of 2019. months from now.

China Beige Book conducted more than 3,300 interviews between November 12 and December 11 in its latest quarterly survey of business activities.

For the fourth quarter, the China Beige Book noted a sharp drop in sales growth for luxury goods, food and clothing compared to the previous quarter.

“Companies in these subsectors recorded smaller margins, as well as weaker sales volumes and employee growth,” the report said.

That was in contrast to the better performance of car dealers and sellers of furniture and appliances, suggesting that wealthier households could boost overall consumption by spending money on high-priced items, the Beige Book said.

Creditors were also more concerned about retail. While the rate of loan decline remained fairly stable in most sectors – about 10% to 20% – that of retail sales rose to 38% in the fourth quarter, the report said.

Domestic demand is an important part of Beijing’s plan for sustainable economic growth in the coming years. China is seeking to rely more on its own consumers than exports for growth, especially as tensions with key trading partners such as the US are mounting.

In the services sector, the China Beige Book also found that fourth quarter earnings were not driven by consumers, but by industries that meet business needs such as telecom, shipping and financial services.

Chain restaurants did not grow as much, while travel did not grow and hospitality was the weakest revenue, the report said.

The Beige Book also pointed out that compared to a surge in exports, Chinese imports have stalled since an initial recovery from the first quarter shock.

The Chinese market remains a bright spot for companies around the world after the country managed to contain the outbreak domestically and return to overall growth by the second quarter.

But scattered Covid-19 cases, most recently in the capital Beijing in the past two weeks, and the continued spread of the virus abroad, mean the pandemic is an uncertainty for Chinese authorities and companies.

According to the National Bureau of Statistics website, China’s full-year economic data for 2020 comes out on Jan. 18.