China’s economy has slowed down due to weak consumption after the pandemic.
Beijing officials warned at this month’s economic planning meeting that the CCP was facing “triple pressures” of “demand contraction, supply shock, and weakening expectations.”
According to the latest data from the National Bureau of Statistics, China’s retail sales were not up to expectations in November with 3.9% growth compared to last year, much lower than the 4.6% year-on-year rise forecast by a Reuters poll.
CNBC analyzed that on Dec. 30, the job and income instability of Chinese people has reduced people’s consumption. In addition, the enormous debts of property developers like Evergrande also make some families hesitant to buy into real estate.
Zhiwei Zhang, Pinpoint Asset Management’s chief economist, specifically pointed out that China’s “zero-tolerance” anti-pandemic measures, the downturn of the property sector, and tight fiscal policy have accounted for the country’s weakening consumption.
Furthermore, Hong Kong’s retail revenue has declined in 2019 and 2020. The CCP’s suppression of the democracy movement had interrupted Hong Kong’s economy, which led to its depression before the pandemic.
According to Goldman Sachs’ calculation, consumers have spent more on food and clothing instead of services like education or entertainment. As a result, they expect the gap between goods and services to narrow slightly next year.
In a Dec. 20 report, Fitch Ratings predicted that 12, or one-third of its 40 rated Chinese real estate developers would fall into a potential liquidity strain if home sales revenue drops by 30% next year.
Fitch said, “the longer the stresses on China’s property sector last, the greater the risk of a loss in consumer confidence.”