The Chinese Communist Party sacrifices the economy to maintain its political power, leading to the exodus of foreign capital and businesses, as well as wealthy individuals immigrating, taking both knowledge and wealth with them. Bankruptcies, unemployment, and social upheaval have become commonplace, as the era of high growth slowly dissipates, shrinking China’s economic pie and causing an overall degradation of various aspects of Chinese society.
Since the lifting of restrictions in early 2023, the long-awaited surge in outbound tourism has not materialized. In addition to reduced international flights, bleak economic prospects have also discouraged people from spending money, with many tightening their pockets.
The number of Chinese tourists traveling abroad in 2023 decreased by 40% compared to pre-pandemic 2019 levels. According to airport operator ADP, the number of Chinese visitors to popular tourist destination France only reached 28.5% of 2019 levels.
The situation this year may be even worse. A survey by consultancy firm Oliver Wyman revealed that only 14% of high-income families who traveled abroad in 2023 plan to do so again in 2024.
United Nations tourism data shows that Chinese tourist spending abroad decreased by 24% compared to 2019. The disappearance of Chinese tourists, once the largest consumer group for overseas travel, has caused the global tourism industry to lose nearly $130 billion.
Compared to previous popular overseas destinations like Paris and New York, Chinese people now prefer to visit domestic small cities where dining and accommodation are cheaper, offering core advantages.
Data from aviation analysis company Cirium shows that domestic airline ticket prices in May this year increased by 16% compared to the same period in 2019, while international flight ticket prices decreased by 30%. Trip.com, a travel booking website, reported a 2.6-fold increase in bookings for rural destinations in China in 2023 compared to before the pandemic.
An Oliver Wyman report revealed that smaller cities like Yangzhou, Luoyang, Qinhuangdao, Guilin, and Zibo saw the fastest growth in travel bookings during the May Day holiday this year.
Some small cities within a three-hour high-speed train journey from major cities, as well as those with local characteristics such as Dali in Yunnan (lying flat), Zibo in Shandong (barbecue), and Tianshui in Gansu (spicy hot pot), have become popular destinations for young travelers.
The Chinese Communist Party’s crackdown on private enterprises and the service industry has led to the contraction of traditional major employers like internet technology, education and training, and real estate, causing a significant reduction in traditional white-collar positions, making it even more difficult for university students to find employment.
According to incomplete data from Titanium Media, from 2022 to the first half of 2023, dozens of real estate companies laid off 260,000 employees, with companies like Gold Mantis and Sunac China laying off over 50% of their workforce.
The Chinese education industry, which once had a market size of over 3 trillion yuan and employed over ten million people, has seen these positions disappear or shift underground since the Communist Party’s introduction of the “double reduction” policy in 2021.
The 2023 Talent Migration Report revealed a 21.67% year-over-year decrease in total job positions recruited by companies in 2022. The Internet industry saw a particularly severe contraction in recruitment, with a 50.4% year-over-year decrease in pure internet job positions in 2022.
With “graduate to unemployment” becoming the norm, more high school students are abandoning plans to attend undergraduate colleges and opting to become vocational school students in institutions where admission scores exceed those of local universities. A candidate in Hangzhou with a score of 635 on the college entrance examination (far above Zhejiang province’s 595-point threshold for first-tier universities) chose to attend Zhejiang Vocational Police College.
A mainland media professional, Ms. Bai, previously told The Epoch Times, “There is a trend now called ‘downward postgraduate entrance examination.’ While in the past, schools that aimed to pursue postgraduate studies were considered better than undergraduate schools, now many students from renowned universities are seeking postgraduate studies in ordinary undergraduate institutions. People no longer care about which famous university is easier to get into, but rather inquire about the universities with higher interview scores. As long as the interview scores are high, there is no hope of admission.”
Many of the job positions created in China in recent years are low-end blue-collar jobs. A recent survey by Zhaopin Recruitment showed a 3.8-fold increase in demand for blue-collar jobs such as delivery personnel, truck drivers, service staff, and technicians compared to the same period in 2019.
People unable to find professional jobs, especially young people, are forced to take up blue-collar work. The 2023 Spring Recruitment Talent Migration Report indicates that stability is a priority for job seekers, with less than 15% voluntarily changing jobs, while about 45% consider downgrading their employment.
The phenomenon of white-collar workers transitioning to blue-collar jobs is becoming widespread, with reports of former employees of large companies and institutions now working as Didi drivers. Up Media recently reported that a female student specializing in landscape design at Tongji University, after obtaining a master’s degree in hotel management in Europe following her university graduation, returned to China and found a job as a chef in Shanghai, earning a monthly salary of 5500 yuan.
Salary cuts across industries:
The 2023 Workplace Insights Report indicated an average monthly recruitment salary decrease of 7% in the digital technology industry in 2023, with technical positions seeing a 12% decrease and design positions experiencing an 18% decrease.
State-owned enterprise salary cuts:
In January, Economic Observer reported that employees from various industries and levels of state-owned enterprises stated that their salaries and year-end bonuses were reduced in the fourth quarter of 2023, particularly affecting management and administrative positions. Some interviewees mentioned that the total salary for 2023 decreased by nearly 30%.
Financial industry salary cuts:
Mainland China’s First Financial reported on April 11 that the average salary reduction for management in Chinese banks in 2023 was 13%, with some top-level executives experiencing reductions of up to 40%.
Economic Observer reported on May 11 that several investment banks, including CITIC Securities, China International Capital Corporation (CICC), and CITIC Securities International, had recently adjusted employee salaries and positions: CITIC Securities reduced salaries by about 20%; CICC had a maximum reduction of 25%; and CITIC Securities International had already reduced salaries by around 20% earlier in the year and planned another decrease.
Civil service salary cuts:
Since 2021, multiple provinces in China have reported salary cuts for public servants, including affluent regions like Jiangsu, Zhejiang, Guangdong, Fujian, and Shanghai.
Starting from December 2020, Beijing initiated strict austerity measures and established a “Salary Reduction Office” within some government agencies to remove previously deemed “unreasonable” benefits, resulting in reduced welfare benefits and bonuses.
Teacher and doctor salary cuts:
On September 26, 2023, 21st Century Economics reported that doctors at Beijing Tongren Hospital experienced a significant decrease in their August salaries, with performance bonuses and night shift pay seeing a 50% reduction.
A report by Sohu.com cited a doctor in the emergency department in Guangxi, stating that the hospital drastically reduced salaries starting from March 2023, with initial pay of 6,550 yuan decreasing to 5,324 yuan, and dropping further to 4,210 yuan by May, representing over a 35% reduction.
Military and police salary cuts:
Mr. Hua, a former soldier, informed The Epoch Times in January that many of his former comrades in the military had their subsidies discontinued. Several comrades had not received subsidies for about six months. Ms. Bai, a retired service member, reported that a vice chief of a police station in a certain coastal city in mainland China had his salary reduced, along with all officers in the station.
On April 20, Radio Free Asia reported that a retired teacher from a unit mentioned that police officers in cities like Tianjin, Nanjing, and Dalian experienced a 20% salary cut.
Reduced retirement pensions:
A netizen from Guangzhou mentioned that their mother, a retired teacher from a local university, saw her monthly pension drop from around 8,000 yuan to 4,500 yuan, with another retiree experiencing a reduction from 9,000 yuan to 5,000 yuan per month.
Nationwide salary cuts:
According to Bloomberg’s analysis of Zhaopin Recruitment data in January, employee salary reductions across 38 major Chinese cities reached a historic high, with a 1.3% year-on-year decrease to 10,420 yuan in the fourth quarter of 2023, marking three consecutive quarters of decline. Beijing saw salaries fall by 2.7% year-on-year for the fourth consecutive quarter, and Guangzhou’s salaries declined by 4.5%.
The 2023 Workplace Insights Report revealed that 71% of surveyed digital technology professionals have downgraded their consumption habits, with 34% spending less than 20 yuan on daily work meals, and nearly 80% paying monthly rent below 3,000 yuan.
South China Morning Post reported that Chinese consumers are now prioritizing price and value for money over brands, leading to headwinds for international brands like Uniqlo and Nike in the Chinese market, which are now facing competition from lower-priced “white label” brands.
As Chinese society experiences a downgrade in consumption, the wholesale and retail prices of Guizhou Maotai liquor, which used to serve as an indicator of domestic demand, have continued to decline. In June this year, the wholesale price of Feitian Maotai plummeted to 2,200 yuan.
December 2023 statistics released by the Chinese Communist Party’s National Bureau of Statistics indicated a 0.5% year-on-year and month-on-month decrease in the Consumer Price Index (CPI), marking the largest year-on-year decrease since November 2020. Pork prices decreased by 31.8% year-on-year.
Shanghai Statistics Bureau data showed a 9.4% decrease in the total retail sales of consumer goods in June 2024, with wholesale and retail dropping by 9.6% and accommodation and catering declining by 6.5%. Food products experienced a 1.7% year-on-year decrease in June; clothing dropped by 5.0%; goods for daily use decreased by 13.5%; and fuel saw a 4.7% year-on-year decrease in June.
Citing rating analysts from Fitch Ratings, Bloomberg reported that in the first half of this year, China’s restaurant industry growth rate fell below 8% for the first time since 2010, extending to industries like clothing, cosmetics, and jewelry.
Cheap “Poor Man Combos” and “Leftover Mystery Boxes” (where food stores and restaurants mix unsold, expired food and sell them at low prices) are becoming popular, with a trend of young people in Beijing and Shanghai eating at inexpensive “elderly cafeterias.”
Although official Chinese data shows ongoing economic growth, the pace has significantly slowed compared to previous years, suggesting a slowdown in the economy. This means that the middle class can no longer rely on continuous economic growth, impacting the quality of life for future generations.
In addition to the real estate crisis, China faces challenges like local government debts, stock market plunges, declining exports, and reduced foreign direct investment under geopolitical tensions.
The top priority for the Chinese Communist Party is national security rather than the economy, with authorities pushing for measures like expanded anti-spy legislation, raising concerns among foreign companies. The Party is reluctant to provide consumer subsidies that could stimulate spending for fear of further promoting “welfarism.”
Taiwanese economist Wu Jialong previously told The Epoch Times that the economy is a chronic issue for the Communist Party. The fundamental problem the Party faces is whether to focus on economics or politics. It cannot manage the economy effectively within an open political framework like Western countries and consolidate political power within a market economy.
“The Communist Party has never abandoned two things: first, it has not returned power to the people, back to normalcy. Second, the Communist Party is always pursuing rent-seeking, exchanging power for benefits. It’s like a mafia boss collecting protection money. The Communist Party always wants to collect protection money; it is dividing the cake rather than expanding it.”
Wang Guochen, assistant researcher at the Chinese Economic Research Institute, told The Epoch Times that with the decline of the mainland China economy, the only solution lies in changing the ruling party. The country may still exist, but the Party will eventually need to be replaced. If the Communist Party continues to rule, there will be no end to the decline until the regime is overthrown.