In recent years, China’s economy has been declining, with “consumption downgrade” becoming a hot topic. According to reports from Chinese media outlets, the year-on-year growth rate of China’s total social consumer goods retail sales, which reflects consumption trends, has been “halved,” significantly lower than pre-pandemic levels; consumption decline in Beijing, Shanghai, and Guangzhou is severe. At the same time, there is severe polarization in consumption, with the retail sales volume in Shanghai and Gansu differing by 345 times.
According to a report by mainland China’s The Paper on March 6, a study analyzing data from various cities in China found that in 2024, the total social consumer goods retail sales in China increased by 3.5% annually, a decrease of 3.7 percentage points from 2023, and the growth rate was much lower than the pre-pandemic level of over 8%. Domestic demand contributed 69.7% to economic growth, with the contribution rate of final consumer spending decreasing to 44.5% from 2023.
Tier-one cities with trillion-yuan (RMB, hereinafter) levels, such as Shanghai, Beijing, Shenzhen, Chongqing, and Guangzhou, are facing noticeable consumption softness. These cities, which have the largest economic scale, the most up-to-date industrial structure, the highest number of foreign residents, and the highest total social consumer goods retail sales base, are experiencing the most serious consumption decline among all city groups.
Data shows that in 2024, the average growth rate of total social consumer goods retail sales in 27 trillion-yuan level cities was only 2.6%, with an average consumption-to-GDP ratio of 34.7%. Among them, Beijing, Shanghai, and Guangzhou experienced the most severe decline, with Tianjin showing negative growth, and Jinan, Foshan, and Dongguan approaching zero growth.
The report states that the noticeable consumption softness in China’s tier-one cities is partly due to high-income groups shifting towards conservative consumption due to anticipated changes. Surveys found that consumers with higher monthly incomes and education levels are more likely to shift towards conservative consumption due to anticipated changes, indicating that this group is more sensitive to assessing economic conditions.
The city with the lowest growth rate in social retail sales is Sanya in Hainan, at only -15.90%.
There is a severe polarization in consumption. Among the available data for 172 cities in 2024, Shanghai had the highest total social consumer goods retail sales at 1,794.19 billion yuan, while Gannan Tibetan Autonomous Prefecture in Gansu province had the lowest at only 5.198 billion yuan, a difference of 345 times between the two.
Cities with a GDP below 250 billion yuan often have a single industrial structure, with high proportions of agriculture and mining, lack of investment, insufficient stimulus to resident income, and weak growth in total social consumer goods retail sales. Stimulating consumption policies such as trade-in programs may not be very effective in these cities because residents have not reached a certain consumption threshold.
The report stated that the survey was based on the collection of national data on social consumer goods retail sales and GDP for 375 prefecture-level cities in 2017 and 2024, as well as China’s social consumer goods retail sales and GDP time series data from 2001 to 2024, combined with a survey of 522 Shanghai residents conducted in March 2025, leading to the above results.
However, it is widely believed that the GDP and other official data relied upon by the mainland media survey is often suspected of being “beautified” by the time it is released.