Recently, Professor Sun Liping from Tsinghua University stated in a lecture that the Chinese economy is currently in a contraction phase, and the era of massive centralized consumption is essentially ending. It is expected that “the poor can’t afford to consume, the middle class dare not consume, and the wealthy don’t know what to consume” will be a common phenomenon.
On April 15th, according to a report by Chinese media 21st Century Economic Herald, retired professor Sun Liping from Tsinghua University mentioned in a themed lecture on the 14th that the Chinese economy is undergoing a turning point, and the consumption industry is also entering a turning point.
“From an economic perspective, we are in an economic contraction phase, which corresponds to the previous decades of expansion. At the same time, the era of massive centralized consumption that we have experienced before is basically coming to an end,” he said.
After the reform and opening up, China coincided with the global consumption revolution. Over the past few decades, consumption has shown a trend of convergence and conformity. However, with the shift from massive centralized consumption to normalized consumption, the impulsive and conforming stage of centralized consumption may come to an end.
In the current phase of increasingly differentiated normalized consumption, the situation of “the poor can’t afford to consume, the middle class dare not consume, and the wealthy don’t know what to consume” has become a widespread phenomenon. With consumption differentiation and considering the background of economic contraction, the entire society may see a trend of sinking consumption.
Sun Liping said, “The process of past massive centralized consumption was linked to technological revolution. Now that this technological revolution has basically come to an end, and new things have not yet emerged on a large scale, we are in a situation where technology is spiraling inward. For example, there are many fancy features on televisions and cars, but many of them are unnecessary.”
He pointed out that true innovation will determine the future, but China has two characteristics. “First, the era when a few dominant industries in the entire society could determine the economic situation is over. Second, the era when companies could make money by following a trend may also be over.”
Furthermore, in analyzing the consumption trend triggered by the “silver economy,” Sun Liping mentioned that the aging process in China may far exceed expectations, and the level of aging could be more serious than imagined. There are over 10 million people receiving monthly pensions exceeding 10,000 yuan, indicating a huge “silver-haired market” in the future, but this consumption has nothing to do with trends or fashion.