Domestic consumption

A livestreamer’s comments over the cost of an eyebrow pencil recently brewed a public opinion storm in China. While the incident may be stirred by the livestreamer’s insensitive comments, it speaks to the public’s deeper discontent with the grim economic outlook and employment prospects. Lianhe Zaobao correspondent Chen Jing tells us more.

In the first summer vacation since Covid-19 lockdowns were lifted in China, study tour operators are back in full force throughout the country. Interestingly, two extremes have emerged in terms of spending on such tours depending on region and family income. Against a backdrop of uneven economic development and unequal distribution of educational resources across China, will this polarisation aggravate its social stratification problem?

With the rise of e-commerce, traditional department stores are having a hard time attracting customers, especially following three years of the pandemic. While some stores have managed to re-style themselves to tap into the younger generation, others have struggled to move past the fashion of 20 or 30 years ago and are closing their doors as a result.

Hong Kongers have recently found a nearby spending destination in mainland China: Shenzhen. Since the summer vacation, a steady wave of tourists from Hong Kong has crossed the border to visit the various shopping spots in the mainland Chinese city. Lianhe Zaobao journalist Daryl Lim shares his findings from interviews in Shenzhen.

Over the past four decades, China’s economic growth has been mainly driven externally by exports and internally by investments. But China can no longer count on exports to drive economic growth. Thus, the country is seeking to boost domestic demand. Academic Gu Qingyang shares that China needs a multi-prong approach, which would require a significant transformation of the economy.

Chinese academic Han Heyuan notes that following the pandemic, disposable income in China is not at a level that allows for more domestic consumer spending, leading to economic growth being hampered. Also, the Chinese mentality is one of saving rather than spending, which makes it more of a challenge to encourage domestic demand.

The Chinese government is pulling out all the stops to boost domestic consumption, including a list of 20 measures from the National Development and Reform Commission. However, given that these measures do not include direct funding policies, how effective will they be in getting people to spend?

While the latest economic data from China show encouraging GDP growth, taken in context, many provinces are actually seeing slower growth as compared with the first quarter of this year. Lianhe Zaobao journalist Li Kang examines the figures and speaks to economists to find out more.

​Population figures are going down in China's major cities, not only in Beijing and Shanghai, but also in Shenzhen and Guangzhou. This trend is not only due to higher costs of living, but deeper concerns that prevent economies from finding a certain equilibrium after headwinds. Economist Li Jingkui explains.