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China's resumption of work and production is accelerating, but the weakening external demand has slowed down the recovery of the manufacturing industry.

The purchasing managers' index (PMI) for the manufacturing sector stood at 50.8 in April, down 1.2 percentage points from March, according to the NBS.

Most sub-indexes of manufacturing PMI declined in April except for an upturn in the supplier deliveries index. The sub-index for production edged down 0.4 percentage point to 53.7 in the period, the statistics bureau reported. The gauge for new export orders slipped to 33.5 from 46.4 in March, resulting in a drop of 1.8 percentage points in the sub-index for new orders to 50.2.

The external demand shrank dramatically due to the COVID-19 pandemic. NBS senior statistician Zhao Qinghe noted that new export orders of some manufacturing enterprises dropped sharply, and even the ones already in production were canceled. As high as 57.7% of the companies reported lack of demand, and that it will take them time to recover as some are facing difficulties in sales.

Zhang Liqun, a researcher at the Development Research Center of the State Council, said the drop in the new export orders sub-index indicates that the pandemic's impact on the world economy and international trade has emerged, putting downward pressure on China's exports.

Although many industries in China have fallen into downturns during the COVID-19 pandemic, production lines of the healthcare industry keep operating at their full capacity.

According to data cited by NBS head Ning Jizhe in his article published in the Qiushi Journal on May 1, investment in and added value of biological medicines and products manufacturing in Q1 increased by 15.1% and 10.5%, respectively. The output of alcohol for medical use grew by 24.8% year on year, and the output of masks increased by 3.5 times compared to the same period last year, with the daily production capacity surging from tens of millions to hundreds of millions.

The majority of listed firms in the healthcare sector witnessed profit growths in Q1, according to financial information service provider Wind. From January to March, 270 listed companies reported profit growths, accounting for 82% of the total, while 58 companies posted drops in net profits, accounting for 18%.

The pandemic has polarized the performance of listed companies in the industry, said Chen Zunde, general manager of Guangdong Fund Investment Co., adding that healthcare service providers suffered huge losses, whereas anti-epidemic related companies barely saw profits fall, such as those specializing in medical devices and traditional Chinese medicine.

According to an analysis from Dongxing Securities, a Chinese investment bank and brokerage firm, the pandemic has provided an opportunity for China's healthcare industry to reach international markets. As COVID-19 continues to rage worldwide, Chinese manufacturers' strong production capacity will help meet the global demand for medical supplies including masks, protective suits, monitors, and ventilators.

Lian Ping, president of the China Chief Economist Forum, said the healthcare sector's share of GDP will likely rise from the current 6.4% to over 7%. And the soaring demand both at home and abroad will drive the development of several subsectors of the healthcare industry including hygiene, epidemic prevention, treatment, equipment, and health protection.

China's civil aviation industry has endured a severe downturn in the last few months. According to the Civil Aviation Administration of China, the industry endured a total loss of 39.82 billion yuan (US$5.63 billion) in Q1, of which airline companies lost 33.62 billion yuan.

The International Air Transport Association also estimated recently that the global airline passenger revenue will have a year-on-year decline of US$314 billion in 2020, a drop of 55%.

Civil aviation expert Qi Qi said he is not optimistic about the aviation industry's future performance due to the pandemic. "The COVID-19 outbreak is much more serious than SARS in 2003, since it lasts a longer time and spreads wider both at home and abroad," he said. "The aviation industry is expected to sustain heavy losses for a while due to the lack of demand and low ticket prices."

China has issued a batch of supportive policies for the aviation sector, including fee reductions and exemptions, tax adjustments, and subsidies for international flights.

"The domestic market of civil aviation industry will rebound only after the travel restrictions are lifted across the nation," Qi said. 

China's cross-border e-commerce has been growing rapidly despite the severe impact of COVID-19 on traditional foreign trade sectors. According to the NBS, the retail import and export volume of cross-border e-commerce in the first two months registered 17.4 billion yuan, surging 36.7% year on year.

"As a new way for enterprises to expand international markets, cross-border e-commerce has played an irreplaceable role during the outbreak," said Wei Hao, dean of the International Economy and Trade Department at Beijing Normal University. 

In the wake of worldwide spread of the novel coronavirus, global demand shrank dramatically, and numerous export orders of Chinese enterprises had been canceled in a short period of time. Under this circumstance, many exporters in China have turned to cross-border e-commerce to get more transactions and open up new markets, Wei said.

On April 7, the State Council decided to set up 46 integrated pilot zones for cross-border e-commerce. Along with the existing 59 zones, the total number reached 105 in China, spread across 30 provinces, autonomous regions and municipalities.

Zhang Li, head of the Institute of E-commerce at the Chinese Academy of International Trade and Economic Cooperation, noted that the aim of establishing integrated pilot zones is to promote innovative development of cross-border e-commerce in more places. The expansion of pilot zones will drive continuous innovation and high-quality growth of China's cross-border e-commerce, so as to inject fresh energy into the global economy.

The Ministry of Commerce said in early April that China will next promote the building of overseas warehouses, and encourage enterprises to improve supporting services. The country will back domestic cross-border e-commerce platforms in going global, and support various foreign trade companies and manufacturing enterprises in cooperating with international e-commerce platforms to achieve common development.

As one of the industries hit hardest by COVID-19, the restaurant and food service industry saw a sharp drop in revenue in Q1 compared to the same period last year. Data from the NBS shows that, from January to March, the revenue of China's restaurant and food service industry reached 602.6 billion yuan, down 44.3% year on year. In March alone, the industry's revenue was 183.2 billion yuan, down 46.8% year on year.

While the restaurant sector is beginning to recover as the epidemic wanes domestically, business owners are still facing numerous challenges. According to a report issued by the China Hospitality Association on April 16, the restaurant industry's work resumption rate increased sharply in March, but showed limited revenue growth. More than 90% of restaurant enterprises acorss the country reported revenue drops of over 50% year on year, and 94.61% of restaurants saw less than half of the number of customers compared to last year, the report indicates.

The major challenges for food service providers are capital shortage, complicated approval procedures for employees' return-to-work applications, and the lack of consumer confidence and ability, said Wang Yao, head of the International Institute of Green Finance at the Central University of Finance and Economics. 

Local governments and financial institutes have rolled out a spate of policies to support the industry. The People's Bank of China, the Ministry of Finance, and the Ministry of Commerce among others carried out various measures to ease the burden on enterprises and encourage them to develop new business models. Local governments also handed out vouchers that can be used in restaurants to boost consumption.

Speaking about when the restaurant industry could get back on track, Wang Qunyong, a professor of the School of Economics at Nankai University, said it depends on the epidemic prevention and control, the recovery of China's economy, and people's expectations.

He said that the industry should alter its business pattern by partially shrinking offline business and expanding online service. Meanwhile, it should strive to enhance the standardization and transparency in production process, and improve the nutrition of foods.

The tourism industry is also facing great challenges. The COVID-19 pandemic has brought the most extensive and profound shock to China's tourism sector since the start of reform and opening up, according to a report released on April 21 by the Tourism Research Center under the Chinese Academy of Social Sciences.

As almost all travels and business trips were postponed due to the outbreak, tourist numbers and hotel occupancy rates fell greatly, resulting in huge losses in revenue, said Peng Huagang, secretary general of the State-owned Assets Supervision and Administration Commission, at a press conference on April 20.

The Tourism Research Center projected people to take 3.94 billion domestic trips in China in 2020, a decrease of 34.97% year on year. It also projected China to have a total tourism revenue of 3.92 trillion yuan in 2020, an annual drop-off of 39.83%.

To offset losses brought by the outbreak, China's tourism sector is seeking industrial upgrading and long-term development through better services, smarter infrastructure, and incorporating livestreaming as a new business model.

As more scenic spots reopen in China, the tourism industry is now seeing a recovering trend. It is estimated that China saw 115 million domestic tourist trips during the five-day May Day holiday that started on May 1, and domestic tourism revenue generated during the period totaled 47.56 billion yuan, according to the Ministry of Culture and Tourism.

"The tourism market will gradually be back to normal with epidemic control measures easing and people's desire for travel increasing," said Liang Jianzhang, co-founder and chairman of Trip.com Group, China's largest online travel agency. He said the domestic tourism market could return to 70% or 80% of normal levels in three months, while outbound tourism will depend on situations abroad.

The global video game industry saw growth as demand for online products increased amid the COVID-19 pandemic. Consumers around the world spent more than US$16.7 billion on mobile games in Q1 2020, 5% higher than the three months prior, according to the mobile data and analytics platform App Annie.

Financial reports of China's major gaming companies including Tencent, NetEase, and Perfect World have also revealed the growing demand in the mobile gaming industry.

Although new user growth in Q1 slowed to 2 million, registering only a 0.31% increase from the previous quarter, the revenue of China's gaming market jumped 25.22% quarter on quarter to 73.2 billion yuan, which was mainly attributed to mobile games, according to a report from the China's Game Publishing Commission and research firm International Data Corporation.

China's gaming companies saw a quarter-over-quarter increase of 31.19% in overseas revenue during the period, amounting to US$3.78 billion. This figure was higher than their domestic growth rate. Players in the U.S., Japan, and the Republic of Korea contributed 29.8%, 23.38%, and 14.4% to the total, respectively.

Han Shuai, secretary general of the Shanghai Online Game Association, said at a webinar that the short-term boom in the video game industry came after the large rise in online players and purchases, as the Spring Festival holiday was extended and people were encouraged to work from home because of the outbreak.

However, the pandemic might have a negative impact on the industry in the long term, Han said. Games scheduled to be launched later this year will be affected due to delays in work resumption, and customers could prioritize spending money on daily necessities over culture and entertainment.