SINGAPORE (Mar 20): China has reduced the contagion practically to zero with the drastic measures it adopted and now the workers returning to their jobs (except in Hubei, the most affected province). Is the worst over?

It’s good news that after almost two months of containment the number of contagious people is down. But a recent analysis on the Covid-19 epidemic suggests that the virus is still persistent. We’ve seen that in February the Chinese production dropped dramatically. The industrial production index was up 6.9% in December on a y-o-y basis and was down -13.5% in February. This has already had a considerable impact on the Chinese production process. In February, surveys on the manufacturing sector noted that suppliers’ delivery times indices were high everywhere in the world notably in China. This means that sectors will not go at the same speed of adjustment and the recovery will be delayed.

Is it going to be possible to see a V-shape recovery in China? Or rather a U-shape?

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