Customers look at an advertising discount of 80% or 70% in a supermarket in Hangzo, Zhejiang Province, China on 9 June 2025.
Cfoto | Future publication | Getty images
Beijing – China’s consumer expenses show very little signs of raising soon, giving uncertainty about future money, changing preferences and lack of a social security trap.
To a large extent Four straight months of fall in consumer pricesConsumer confidence is hovering near historical climb, and the real estate is struggling to visit the market. Analysts repeatedly point to a main factor: stable income.
Disposable income in China has reduced its growth pace since the epidemic hit in 2020, which is now growing at an average of only 5% per year, as Asia -based economist Jeremy Stevens in Standard Bank said in a report on Wednesday.
Most jobs are not giving too much. He said that only three of the 16 regions – mining, utilities and information technology services – have seen a greater increment from GDP since 2020.
Monthly business survey shown for May Contraction in labor market Across the board, especially factory navigates American tariffs. Unemployment rate among youth between 16 and 24 years of age and not in school not at 15.8%in April. The official unemployed rate in cities has increased to about 5%.
According to a quarterly survey by People’s Bank of China, a record of 64% Chinese houses was said in the third quarter of 2024 that they would save money instead of spending or investing instead of spending or investing.
According to the latest survey released in March, up to 61.4% in the fourth quarter, while it reflects the tendency of more than 60% of respondents recorded since the end of 2023.
And for those respondents who plan to increase expenses, Education was the top categoryAccording to the PBOC’s fourth quarter survey, after health care and tourism, it was released in March.
More than half of the respondents saw the job market as being more difficult or difficult.
People in China have been interested to save culturally, especially when limited insurance coverage means that individuals often bear the most of hospital treatment, higher education and cost of retirement. The real estate recession of the last few years has also weighed on spending since the accounts of property for most people of domestic money in China.
One way to make people more willing to spend is that the Chief Economist of UKE Securities, the Ministry of Finance, Luo Zheng, has increased the share of state assets paid, more than double pension payment.
He said that increasing public holidays and offering service sector consumption vouchers can also help.
In the last few weeks, Chinese officials have planned Further support employment And Improvement in social welfareBut policy makers have avoided large -scale cash handouts that the US and Hong Kong gave the residents to encourage expenses after epidemic.
Come out of the epidemic, analysts warned Retail sales in China will be cured very slowly Major uncertainty for consumers remained unresolved.
Shanghai-based senior partner Bruno Lance with Ban & Company’s consumer products and retail practices said, “In the decade before the epidemic, the Chinese consumers were ready to buy any innovation and even capable of buying innovations that were not really innovations. ,
“They are more rational in today’s world. They know what they want,” he said on a webinar on Thursday.
China is about to report retail sales for May on Monday. The analysts voted by Reuters predicted the recession of year-on-year growth in April, below 5.1%.
A change out of big cities
Another factor behind reading negative CPI is that Chinese consumers are turning to low-priced products, either partially benefiting from overproduction of relatively high-quality goods, or carrying to places away from large cities where the cost of living is low.
Shanghai lost 72,000 permanent residents last year, while Beijing saw a decline of 26,000, Worldpanel and Ban & Company reported in a report on Thursday. Both cities are usually classified as “Tier 1” cities in China.
As a result of the population shift, small cities were classified as “Tier 3” and “Tier 4”, which experienced a higher increase in the amount and price of daily requirements sold last year – the report helps to offset the decline in Tier 1 cities, stated in the report. The study includes packaged food, beverages, personal care and home care.
It was found that while the total volume of such items sold in China increased by 4.4% last year, the average selling price fell to 3.4%, as consumers preferred low -priced products and businesses and increased publicity.
The trend is also affecting the sale of flowers.
The Kunming International Flora Auction Trading Center in Asia’s largest flower market, Yunnan province, stated in May that there is more demand from low-rich cities, resulting in high amounts but low average selling prices.
A flower seller Lee Shenguan, a flower seller near the trading center, calmed down after the May holiday season during the May holiday season. He said that the prices of flowers have come down slightly, partly because more people are increasing flowers. She demands to be taken around the National Day holiday in early October.
According to official data, for a sense of inequality, rural per capita disposable income has been reduced by half over the years. Last year, per capita disposable income in urban areas was 54,188 yuan ($ 7,553). It’s much less than $ 64,474 reported to America until December.
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Stevens of Standard Bank reported that the ratio of consumption for income in rural areas has “increased to a great extent” and has crossed pre-political levels, while urban families have declined. But he said that lower—-been houses do not have a measure of money that do to increase high-or-I groups meaningfully in the near period.
He said that the top 20% for the total income and consumption in China is 20% and 60% of the total savings. “Policy support for low -income groups, while well meaning, is insufficient without structural wage improvement.”
In addition, China’s “general prosperity” rhetoric “has introduced institutional revaluation and policy changes, while well, with intent, added to uncertainty,” Stevens said, keeping in mind the changes, not yet a new balance has not been completely found. “
