The ongoing decline in the Chinese economy has led to a downgrade in consumer spending and saving money has become a hot topic on the social platform Xiaohongshu before the Chinese New Year. Additionally, due to the deteriorating overall environment, people in China are losing hope for the future.
According to a report released last Wednesday (January 22) by the Shanghai Lifestyle Research Institute, a think tank under Japan’s Hakuhodo, 80% of Chinese consumers believe they are experiencing “consumer downgrading.” The number of social media posts related to consumer downgrading in China has increased approximately five times from 2023 to 2024.
The report surveyed 3,000 respondents aged between 20 and 59 living in China.
In a report by Reuters, the phenomenon of consumer downgrading in Hainan is particularly noticeable. Data released by Hainan Customs in early January showed that the number of shoppers visiting Hainan in 2024 decreased by 15.9%, from 6.756 million in 2023 to 5.683 million. The total amount spent on duty-free goods in the province in 2024 was 30.94 billion RMB, a 29.3% decrease from the previous year.
On the past Sunday (January 26), a Xiaohongshu user named “Paopao” posted a video listing discounted fast food items from major brands each day of the week, such as “McDonald’s Member Day on Monday, Heytea with free delivery, and Lawson with a 5 RMB discount on purchases over 15 RMB.”
Reports indicate that there are over 1.5 million posts on Xiaohongshu about saving money, with a total view count exceeding 130 million.
According to Radio Free Asia, Mr. Chen from the south, although unaware of various “money-saving” posts on Xiaohongshu, felt the impact of consumer downgrading before the New Year as a small business owner. He said, “In our family, apart from the children’s expenses, us adults don’t spend much, except for cigarettes and tea, and maybe some new clothes for the New Year.”
Mr. Chen mentioned that even his daily consumption of cigarettes and tea has downgraded, with a shift towards lower-tier brands. For example, the price of Furong cigarettes is generally higher than that of peony cigarettes in the current Chinese market context. Furong Wang (soft blue) retails for 60 RMB per pack, while peony (soft blue) is 35 RMB.
Taxi driver Fang Min from Wuhan mentioned that business was notably weaker than in previous years leading up to the holiday season. He described how the daily income during this period, usually around 500-600 RMB, has dropped to only about 400 RMB now.
In the post-pandemic era, compounded by economic deterioration, Chinese citizens are losing confidence in the future. Before the Chinese New Year, Radio Free Asia interviewed several Chinese citizens.
A woman from southwestern China expressed that the New Year felt somewhat dull, mainly consisting of reunion dinners, buying new clothes, setting off firecrackers, and fireworks. When asked about her thoughts for the new year, she expressed concerns about the country’s situation worsening but was reluctant to discuss further.
Another woman from eastern China mentioned that celebrating the New Year by making dumplings at home was sufficient. Regarding wishes for the new year, she expressed a lack of expectations due to the worsening economic environment, anticipating more challenges for the people in 2025 compared to 2024.
When asked about the impact of the economy on their daily lives, the woman mentioned that it was significant, with fewer job opportunities and reduced investments across various industries and government sectors, resulting in shrinking wallets and a vicious cycle of declining consumption.
Concerning whether they were interested in watching the CCTV Spring Festival Gala, she said her family had not watched it in years. She mentioned the deteriorating environment for the people was not in line with the superficial praise offered through such broadcasts.
A man from central China mentioned that he had no thoughts about the future, as the past three years of the COVID pandemic made the world feel surreal, leaving him confused and unable to predict what lies ahead in terms of both personal and international situations.
He reflected on the relationship between humans and nature post-pandemic, feeling perplexed about the international situation. He said that he couldn’t articulate or predict the future and that there was a sense of stagnancy in relations between countries and individuals.
This article is adapted from Radio Free Asia.