As such, it seems that in China, as elsewhere, the manufacturing sector has been much more robust than the services sector. Perhaps this is not surprising given that households around the world could consume manufactured goods but have had their ability to spend money on experiences sharply curtailed. This is reflected in China’s soaring export numbers as well as in figures such as U.S. retail sales, which were 12.3% higher in March 2021 than they were at the pre-pandemic peak, even when adjusted for inflation (Figure 2).
If China’s manufacturing and export sectors have grown more quickly than the rest of its economy, then it follows that other parts of the Chinese economy must be growing at a slower pace. This much is evident from China’s domestic air travel numbers, which had been growing at about 7% per year pre-pandemic. Post-pandemic, Chinese domestic air-travel never fully recovered (Figure 3). Meanwhile, international travel remains 97.8% lower.
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By: CME Group