The consumption power of Chinese residents will continue to decline in 2023. The picture shows a customer buying pork in a supermarket in Hangzhou, Zhejiang Province on April 11, 2023. (STR/AFP)
[The Epoch Times, November 13, 2023](Comprehensive report by Epoch Times reporter Xia Yu) Several independent surveys and other data show that China’s consumption rebound slowed down in October and private enterprise confidence lost momentum, indicating that the economic recovery has a long way to go.
China’s consumer leisure and transportation demand indicators released by QuantCube Technology, a real-time economic intelligence provider based in Paris, and independent consumer confidence survey data released by the US Morning Consult (Morning Consult) both declined month-on-month in October. The Cheung Kong Graduate School of Business’ survey on private enterprise confidence also showed that private enterprise confidence also declined in October.
The data, coupled with official Chinese data showing weak service sector growth and falling consumer prices in October, mean China struggled to rebound in consumption last month despite Beijing announcing more fiscal stimulus.
Chinese are tightening spending
The consumption outlook is particularly important to China’s economic growth. During the eight-day Golden Week holiday in October, per capita tourism expenditure was still lower than pre-epidemic levels. Coupled with the real estate crisis and lack of economic confidence, it is difficult to promote domestic demand, leaving China’s prices still hovering on the edge of negative growth in the second half of the year.
A Bain & Company survey of 3,000 Chinese shoppers found that more than three-quarters of respondents planned to spend less this year or maintain spending levels given the uncertain economic situation.
The Associated Press reports that business at Shi Gengchen’s pool hall in Beijing’s Chaoyang District has slowed down. Shi said that the poor economic situation has affected his business, and “there are fewer customers than before.” He added that sales were only 40% of pre-pandemic levels.
“I don’t have much consumer spending,” he said. “Of course, everyone has the desire to spend money, but you have to have money to spend.”
Hu Min, a convenience store employee in Shijiazhuang City, Hebei Province, told the Associated Press that she no longer spends money on anything except daily necessities.
“I just think people aren’t spending as much money as they used to, probably because they don’t have a lot of money to spend,” she said.
“Confidence in China is declining rapidly”
QuantCube metrics are based on other data sources such as web search queries, traffic data reflecting people’s movements, and consumer reviews. “Despite the government’s latest fiscal stimulus measures, our data shows continued deceleration across all sectors in October, particularly in transportation,” the company said in a report.
Morning Consult said in a report that the consumer confidence index, which asks consumers about their personal finances, expectations for business conditions and major household attitudes toward purchases, fell below 150 for the first time since February.
“Confidence in China is declining rapidly,” the report added.
In addition, the Cheung Kong Graduate School of Business’ Beijing Private Enterprise Prosperity Index dropped slightly month-on-month in October and is still below the confidence threshold. The survey covers private companies that are generally relatively successful within their respective industries.
The survey’s profit expectations index has remained below the confidence threshold for five consecutive months. “Over the 12 years of our survey, profit expectations have been unusually long-term below the confidence threshold,” the business school said in a report.
China’s economic growth slumped in the first half of the fourth quarter of this year
Bloomberg reported that economists led by Hui Shan, chief China economist at Goldman Sachs Group, wrote in a report: “With disappointing PMI and a larger-than-expected decline in exports, we believe the economy will recover from September to October. Activity may slow down.”
The National Bureau of Statistics of the Communist Party of China announced that the official manufacturing purchasing managers index (PMI) fell to 49.5 in October from 50.2 in September, falling below the 50 line of prosperity and contraction; the Caixin manufacturing PMI was also 49.5, a trend consistent with the National Bureau of Statistics data. . Trade data released by the Bureau of Statistics also showed that China’s exports have declined for six consecutive months, with exports in October falling 6.4% compared with the same period last year, far exceeding market expectations of 3.5%.
Goldman Sachs economists said that combined with signs of softening demand for housing and steel in early November, “growth appears to have subsided” in the first half of the fourth quarter.
The latest data shows that China’s consumer price index (CPI) fell by 0.2% in October, falling into deflation again, and the producer price index (PPI) also continued to decline. This highlights the difficulty of the Chinese economy in boosting domestic demand and thereby supporting economic growth.
Editor in charge: Ye Ziwei#