“Given the subdued outlook for the housing market, it will take time before consumer confidence is restored,” Kuijs said. “While the government is looking for solid consumption growth, consumer spending is hampered by both lower household income growth and weak consumer confidence,” said Louis Kuijs, chief Asia economist at S&P Global Ratings.Ī crisis in the housing market, where about 70% of China’s household wealth is tied up, has further curbed their desire to spend. In the first nine months of 2023, retail sales increased just 6.8% from a year ago, a rate that is below pre-pandemic growth levels in 2019.
Wage growth has also stagnated, reducing the average disposable income. Youth unemployment hit a historic high of 21.3% in June, before the government suspended the release of the data. The middle class in the world’s second largest economy has not had an easy year.
