Spending yet to match big crowds amid China's holiday buzz

Once prolific shoppers, Chinese are reining in spending owing to economic uncertainty

- Joyce ZK Lim, Aw Cheng Wei and Michelle Ng

SHENZHEN / CHONGQING / BEIJING - As crowds throng restaurants, malls and tourist attractions during China's ongoing week-long national day holidays, business owners and policymakers across the country have their sights trained on one thing: reeling in the elusive consumer dollar.

Chinese leaders have been on a sweeping drive to shore up an economy hamstrung by weak domestic demand. Since late September, they have rolled out a raft of aggressive stimulus measures and pledges, which have fueled market optimism and sent Chinese stock prices surging.

Seeking to translate this bullish sentiment into the real economy, local authorities across the country have dished out consumption vouchers to promote spending, while stores selling items from clothes to jewelry have dangled discounts.

But despite the holiday buzz, shopkeepers whom The Straits Times spoke with on Oct 2 say they have not yet seen increased consumer spending across the board.

Once prolific shoppers, Chinese consumers have in recent years cut back on spending, wary of an uncertain economic outlook and spooked by falling prices of the real estate properties and stocks in which they store wealth.

This thrift - also called a "consumption downgrade" - has been a drag on the world's second-largest economy, and has contributed to deflationary pressures that weigh on its growth trajectory.

China's economic growth slowed in the second quarter of 2024 to 4.7 per cent year on year, sparking concerns about its ability to meet a 5 per cent growth target for the year. Retail sales - a measure of consumption - underperformed analysts' expectations in August to grow just 2.1 per cent year on year.

Following the recent policy announcements and stock market rally, Shenzhen resident Zhang Jinshuo, in his 30s, found himself richer on paper after his shares gained value over the past week, but remains a cautious spender.