China’s economy continues to struggle, with weak consumer spending. Why do ordinary people lack money to spend? Mainland residents have given a practical answer.
After the strict control measures of the COVID-19 pandemic were lifted, China’s economy, after a brief recovery, has been on a downward trend. The real estate market is in a crisis, the stock market has dropped to its lowest level in five years, and a large number of people are unemployed, leading to a lack of spending power.
Qin Rui, a self-media personality from Liaoning, stated on June 25 that there are three main reasons for China’s economic slump. Firstly, ordinary people don’t have money in hand. Without money, they can’t spend. Where is the money in their hands going? Some spend it on buying houses, while others are preparing for their children’s weddings, which is a major expenditure.
Furthermore, some have fallen ill or are hospitalized, depleting all their savings. Even if some individuals are currently healthy, seeing others spend a significant amount on healthcare makes them cautious about saving for potential medical emergencies.
Thirdly, people are saving for retirement. Apart from employees of government agencies and state-owned enterprises, both urban and rural residents need to contribute to social security. This financial burden, especially when there’s uncertainty in job stability, requires people to set aside money for such expenses.
Moreover, families with children have to allocate funds for their education and future weddings, putting further strain on their finances.
Qin Rui emphasized that with these concerns consuming people’s money, there’s little left for discretionary spending.
To improve China’s economy and stimulate consumption, Qin Rui stressed the importance of ensuring that people have money in hand, suggesting that fundamental social security measures need to be effectively implemented.
A resident from Shandong, known as “Panda King,” pointed out that the current situation is that the rich are hesitant to spend, while ordinary citizens lack the means to, amid a challenging year for making money.
He noted that one contributing factor to this situation is that the pandemic control measures over the past three years have crippled many entrepreneurs, leading to them losing credibility and thereby the ability to access loans to restart businesses. This has significantly diminished opportunities to create profitable ventures.
In recent years, China’s economy has been persistently weak, particularly with a declining real economy.
Wei Wu, a self-media individual from Hefei, Anhui, on June 27, disclosed scenes of numerous e-commerce businesses closing down within a commercial building.
In a video, she showcased a building where only one store was in operation on a floor while others had shut down. She questioned, “Why did these businesses close after just scraping by? If they could sustain themselves, why did they fail?”
Pointing at one closed store, she mentioned it had recently shut down, with neighboring stores closing a month earlier. Some stores are struggling to stay afloat, while others have completely shut down without a glimmer of hope.
Reflecting on the scene, she expressed how individuals without jobs often strive to venture into e-commerce but upon observing the closures, it becomes evident how challenging it is. The sight of locked doors behind the failed businesses signifies the helplessness of the owners. She concluded by acknowledging the difficulty of operating in both online and offline retail sectors in the current landscape.
Wei Wu also documented the closure of physical stores along Qingxi Road in Hefei, where foot traffic used to be high. However, this year has witnessed a surge in physical store closures, leaving the once bustling area deserted.