In March, consumer spending in Beijing continued to remain sluggish, according to official data, showing a year-on-year decrease of 9.9% in total social consumer goods retail sales, marking one of the largest monthly declines since the outbreak of the pandemic. While consumption of 3C products plummeted, the consumption of jewelry and precious metals grew by nearly 30%, highlighting people’s tendency towards value preservation and risk aversion. At the same time, dissidents in Beijing revealed that even the government’s most emphasized stability maintenance funds are reportedly being reduced, exposing the insufficient economic foundation of China.
On April 18, the Beijing Municipal Bureau of Statistics announced that in March, the “total social consumer goods retail sales” decreased by 9.9% compared to the same period last year, and decreased by 3.3% from January to March.
By specific categories, communication equipment experienced a nearly 40% decline. Jewelry and precious metals saw an increase of nearly 30%, one of the few areas with positive growth, reaching the highest increase at 28.5%.
Mr. Qian, a Beijing resident, told Radio Free Asia that many stores and restaurants have closed down, with only take-out establishments doing relatively well. He described a stark change in Beijing’s bustling scenes, with many establishments now shuttered, vacant, and with a surplus of rental space.
Mr. Qian described his current lifestyle as being more thrifty, avoiding unnecessary expenses and cutting costs in half. He mentioned a shift towards prioritizing basics over luxuries and opting to cook at home instead of dining out to save money.
According to Radio Free Asia, another Beijing resident, Mr. Chen, also noted that many stores in the city have closed, partly due to excessive government intervention. Since the crackdown on the lower-income population began under the leadership of Cai Qi, many street-side vendors catering to the grassroots workforce, such as baked goods and snacks, have gradually disappeared. With decreased spending power, many restaurants are struggling to attract customers and may not survive for long.
Mr. Qian also mentioned that Beijing’s consumer sentiment has been declining in recent years due to government policy mistakes, including cracking down on the lower-income population, the COVID-19 pandemic, prolonged lockdowns, and issues with vaccines. With a higher mortality rate in recent years, coupled with capital withdrawal by companies, closures of businesses, layoffs, and salary reductions, the exodus of the unemployed population back to rural areas has led to a sudden decline in Beijing’s residential population. Those who have the means to spend freely have substantially decreased, leading to nearly deserted shopping malls and a significant decline in the restaurant industry, once bustling streets in Beijing and Shanghai are now devoid of people.
Prominent dissident in Beijing, Mr. Jifeng, expressed his observations on the local economy, noting that it does not possess the stability as proclaimed by the authorities. He stated that nearly half of foreign trade businesses have closed down. If the U.S. continues its policy of equivalent tariffs, severing ties with China, it would spell disaster, with almost 70-80% of the businesses facing an uncertain future.
Mr. Jifeng further revealed that even stability maintenance funds are being cut back, indicating financial strains within the government. He mentioned issues with reimbursement processes and delays in expense claims, as officials are now required to pay upfront for expenses before reimbursement, which can take up to half a year. The ease of borrowing money upfront for expenses has also been restricted.
Describing the changes in the city, Mr. Jifeng noted that the landscape in Beijing has altered remarkably, with a significant drop in art sales and closures of businesses, leading to a mass exodus of residents to less expensive suburban accommodations, reflecting a continuous economic decline.
Mr. Jifeng also highlighted the cautious consumer behavior, as people prefer to save money in banks amid shrinking incomes, for fear of further economic deterioration. This trend has seen an increase in national savings even as China’s economy falters, with concerns about insufficient provisions for healthcare, education, and retirement.
While the Chinese government has displayed a firm stance against U.S. equivalent tariffs and retaliations, Mr. Jifeng’s stance on the domestic economy contradicts the official narrative, indicating an underlying lack of foundation. He pointed out that with significant closures in foreign trade businesses, maintaining the current tariffs with the U.S. could lead to dire consequences, with little to no hope of recovery.
Mr. Jifeng disclosed that even stability maintenance funds are being cut back, affecting government officials’ spending habits. Reimbursement for expenses has become a challenge due to the limited funds available, causing delays in processing claims. The once common practice of borrowing money upfront for expenses and seeking reimbursement later has been prohibited, creating budgetary strains for officials requiring them to cover expenses out-of-pocket with uncertain timelines for reimbursement.
Reflecting on simpler times, Mr. Jifeng mentioned the lenient spending policies of the past, allowing officials to visit Beijing for extended periods and enjoy leisure, compared to the present need for swift approvals and adherence to strict guidelines for travel expenditures. He noted the escalating cost of accommodations in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen.