Written By:Kate Everett-Allen, Knight Frank
In China, the number of new Covid-19 cases peaked on 17 February when over 19,000 new cases were recorded in a single day; however, this spike was primarily due to a change in definition used by the province of Hubei.

A month later on 18 March, China witnessed its first day without a single new case recorded. Thereafter, new cases of Covid-19 resurged slightly but are now receding again with 86 new cases recorded nationwide on 1 April.

The number of property sales in 30 major Chinese cities reached 5,976 on 31 March, its highest daily rate since 8 January, up from a low of 22 sales on 8 February and above December 2019’s average of 5,760 daily sales.

The reopening of workplaces between mid-February and early March was reflected in a substantial recovery in activity across different sectors, the recent uptick in property transactions suggests this filtered through into buyer sentiment with a degree of pent-up demand being released.

However, China’s economy is unlikely to see a straight-line trajectory in property sales as labour markets remain weak and consumer sentiment may deteriorate if tighter restrictions return.

Prices have yet to reflect the decline in sales volumes in March. The latest data published by China’s National Bureau of Statistics (NBS) shows residential prices were still rising in February 2020. Data for March will be released on 16 April and is expected to show a marked decline quarter-on-quarter although annual price growth may still breach positive territory for several first tier cities.

Coal consumption by Chinese power plants acts as a valuable proxy for power output and is a good indicator of broader economic activity. The latest data shows that whilst levels have yet to return to pre-Covid-19 levels they are back to 57,000 tonnes – 88% of the average output for 2019.

Data from the service sector however, which is more reliant on face-to-face contact – whether retail, banks, hotels or real estate – has seen less of a resurgence in activity compared to China’s manufacturing industry.

Encouraging consumers to start spending again once lockdowns have been lifted will be a key challenge for governments worldwide, particularly if residents fear further lockdowns, job insecurity or wage reductions.

The latest data from China on consumer spending shows consumer confidence slipped 6% over the two months to February. Discretionary spending was hit hard as employment conditions deteriorated.

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