Coronavirus News Asia

China’s consumers face spending dilemma

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Everyone is expecting them to step off the money-go-round and spend their hard-earned cash.

But Chinese consumers appear more interested in saving their salaries than saving the world’s second-largest economy from stagnating growth.

Instead of splashing out on branded retail items, they are tightening their belts amid concerns that a Covid-19 second wave could be just around the corner from their local mall.

“A return to public spaces might expose them to a new outbreak,” the Southwestern University of Finance and Economics in the Sichuan capital of Chengdu, and Ant Financial, an affiliate of the Alibaba group, stated in a report released last week.

Job insecurity was also highlighted in the study compiled during the first quarter of the year when people were still in lockdown across China. But although the size of the poll was not disclosed, it did cover future spending trends. 

A snapshot showed that 50.2% of households were more interested in boosting their savings than making major purchases.

“The first is the worry about the epidemic [but] secondly, there are concerns about employment and income growth. Most residents, especially low and middle-income people, work in small and micro-enterprises. If these enterprises fail to [get back to normal], the impact on consumption cannot be underestimated,” the report said.

Economic activity

In the opening months of the year, vast regions of China went into lockdown after the Covid-19 outbreak in Wuhan spread across Hubei province and the rest of the country. 

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