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Customers are looking at discounts on 80% or 70% advertising at a supermarket in Hangzhou, Zhejiang Province, China, on June 9, 2025.
CFOTO | Future publication Ghetto images
Beijing – Chinese consumer costs show few signs of lifting soon, given uncertainty about future wealth, changing preferences and lack of social security network.
It was Four straight months of reducing consumer pricesConsumer confidence is moving near historically low levels, and the real estate market is struggling to turn. Analysts repeatedly indicate one major factor: stagnant income.
Disposable income in China has reduced its decrease in growth rate after the pandemic impact in 2020, now it has been increasing only by an average of 5% a year, according to a report on Wednesday Jeremy Stevens.
Most jobs do not give much of an increase. Of the 16 sectors, only three – mining, utility services and information technology services – monitor salary growth exceeds that of gross domestic product from 2020, he said.
Monthly Business Surveys for May have shown labor market Beyond the board, especially when the factories are oriented in US tariffs. The unemployment rate among young people between the ages of 16 to 24 years and not in school remained tall in April at 15.8%. The official unemployment rate in cities has risen about 5%.
A record high of 64% Chinese households said in the third quarter of 2024 that they would soon save money than to spend or invest, according to a quarterly study by the National Bank of China.
Although this was modeled to 61.4% in the fourth quarter, according to the latest study published in March, it reflects a trend of over 60% of the respondents they prefer to save, which has been registered since the end of 2023.
And for respondents who planned to increase costs, Education was the best categoryfollowed by healthcare and tourism, according to the study of the fourth quarter of PBOC, published in March.
More than half of the respondents view the labor market as more difficult or difficult to tell.
People in China were culturally inclined to save, especially since limited insurance coverage means that people often have to take on a larger part of the cost of hospital treatment, higher education and retirement. The decline in real estate over the last few years has also been weighed on costs, as property reports a larger part of the wealth of households in China.
One way to make people more likely to spend is more than a double payment of pensions by increasing the share of state assets paid to the Ministry of Finance, said in a note Luo Jeen, the chief economist at Yuekai Securities.
He added that increasing official holidays and offering service vouchers can also help.
In the last few weeks, Chinese authorities have strengthened plans Additional employment support and improving social well -beingS But politicians avoid the massive cash distribution that the US and Hong Kong have given residents to stimulate expenses after the pandemic.
Coming out of the pandemic, analysts warned that Retail sales in China would recover very slowly As the main uncertainties for consumers remained unresolved.
In the decade before the pandemic “Chinese users were ready and were able to buy any innovation, even innovations that were not so innovation,” says Bruno Lnes, a senior partner in Shanghai, in Bain & Company consumer products.
“In today’s world, they are more rational. They know what they want,” he told Webinar on Thursday.
China is planned to report retail sales for May on Monday. Reuters analysts predict a delay of up to 4.9% on an annual basis, which is less than 5.1% in April.
Change from big cities
Another factor for negative CPI is that Chinese consumers turn to lower-cost products, or partly benefit from the overproduction of relatively high quality goods, or move away from large cities in places where the costs of living are lower.
Shanghai lost 72,000 permanent residents last year, while Beijing scored 26,000 declines, WorldPanel and Bain & Company pointed out in a Thursday report. The two cities are usually categorized as level 1 cities in China.
As a result of the change of population, the smaller cities, categorized as “level 3” and “level 4”, experienced far higher growth of the volume and value of the daily needs sold last year -helping to compensate for the decline in levels 1, the report said. The study covered packaged food, drinks, personal care and home care.
He found that while the total volume of such goods sold in China increased by 4.4% last year, average sales prices fell by 3.4% as consumers preferred products at a lower price and businesses increased promotions.
The trend even affects the sales of flowers.
The International Trade Center for Flora Kunming in Yunnan province, the largest flower market in Asia, said in May that more demand comes from less wealthy cities with a lower level, leading to larger volumes but lower average sales prices.
The business calmed down after the busy season of the festive season, did you say, did she say shenguan, a flower salesman near the mall, said on Friday. She said the prices of flowers have decreased slightly, partly because more people grow flowers. She expects the request to gather around the National Day holiday in early October.
For a sense of discrepancy, disposable income per capita is less than half of the cities of years, according to official data. The disposable income per capita in urban areas last year was 54 188 yuan ($ 7,553). This is much less than $ 64,474 reported for US Since December.
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Stevens of Standard Bank said that the ratio of consumption to income in rural areas “has increased” significantly “and exceeded the pandemic levels, while that of urban households decreased. But he noted that lower-income households have no scale of wealth, which makes higher-income groups to significantly increase consumption in the near future.
The best 20% represent half of the total income and consumption in China and 60% of total savings, he said. “The political support for low -income groups, though well -intentioned, is insufficient without structural wage reform.”
In addition, China’s “common prosperity” of China has introduced institutional redirects and changes in policy, which, although well -intentioned, add to uncertainty, “Stevens said, noting that the changes have” still find a new equilibrium. “