Are Two Speeds Emerging in the Covid-19 Economic Recovery of China’s Export Heartlands?
How Granular Alternative Data provides Unique Insights on the Developments Inside China
A few days ago, we revealed how our global sampling, measurement and aggregation technology could be used to look behind the veil in China as it grapples with the monumental impact of Coronavirus 2019 (Covid-19).
As we noted then, whereas official information and data on the spread of Covid-19 and its impact on China’s economy are largely missing, alternative data sources can help to shed light on the events on the ground.
Whilst there is no denying that markets are deeply troubled by the potential fallout, what has perhaps surprised everyone is the lack of real data that major players have had to work with.
As a result, somewhat ‘DIY’ endeavours to glean insight from alternative data have emerged, including analysts looking at traffic congestion, air pollution, box office revenues and food orders.
Nevertheless, a repeated theme has emerged from these efforts: there are large differences in the social and economic impacts of Covid-19 between regions and cities across China.
Consistent, Objective, Global Measurement with Alternative Data
At KASPR Datahaus, our distributed technology scans, aggregates, analyses and visualizes real-time information on Internet activity and quality by measuring hundreds of millions of connected fixed Internet devices at all over the world.
Our technology has already been applied to create insights for decision makers during various critical events such as natural disasters and political crises.
Every one of these events has either a direct or indirect impact on internet activity and quality. This creates signals that are detected by our geo-located global technology in near real-time, days or weeks before the market knows about them.
Two Speeds?
Each day, we’ve been updating our measurements from dozens of provinces across China.
As we reported a few days ago, there was a clear drop in Internet activity as seen by our platform across every district in China as businesses wound-down for the official Lunar New Year vacation period (24–30 Jan 2020).
However, since the official (delayed) return to work on 10 Feb 2020, a clear pattern has begun to emerge in the speed of recovery.
In Figure 1, we focus in particular on the major export value provinces, and those most heavily impacted by the virus and the associated government lock-downs.
Whereas the economic powerhouses south of Hubei, Guangdong and Fujian, and the so-called ‘home of the iPhone’ to the North, Henan, appear to be trending back to normality, the three provinces to the East of Hubei, Zhejiang, Shandong and Jiangsu, appear to have stalled.
After an initial period of dormancy following the return to work order on the 10th February, a strong recovery pattern was observed for four days over the 24–28 February.
And then, in Zhejiang, Shandong and Jiangsu: flatline.
This is a problem. Collectively, these three provinces account for over USD 850 billion in export value, accounting for three of the top five such regions in China.
Although stock markets seem to recover from the recent Covid-19 panic, sectors and companies whose supply chains and markets are located in these regions might still be exposed to significant business interruptions.
KASPR Datahaus continues its real-time monitoring and we’ll keep following these trends over the coming days.
However, if these observations are anything to go by, the thousands of small and medium businesses across these regions appear to be struggling to get back on their feet.
Where will KASPR Datahaus products take you?
KASPR Datahaus Global daily products offer decision makers in the financial and other sectors a unique informational advantage.
Shocks to internet availability and stability drive trends across industries and ultimately affect the performance of company’s stocks.
In one of our back-testing exercises, using daily-returns data on the S&P 500 VIX index, KASPR Datahaus Global products reveal subtle shifts in internet activity and stability hinting at market-sensitive movements. Predictive model accuracy improves substantially when KASPR Datahaus internet stability products are added to the feature set. Get in touch to read the white-paper.
KASPR Datahaus Global products give you access to daily, fundamental insights across almost 2000 sub-national regions in 136 countries.
Now you can be the first to know when any region goes down, or changes pattern. Probably before the asset owner themselves.
Get more information about our technology and products from our website or contact us directly at info@kasprdata.com.
