China’s Economy Weighed down by Huge Household Debts
In the face of a slump in their economy, China’s State Council emphasized that it would continue the strategy of expanding domestic consumption in its 2022 work report released on March 5. However, boosting the economy by pushing the Chinese people to consume more is likely unattainable for the Communist regime, according to professional analysis.
Katherine Jiang, a Hong Kong-based financial analyst, told The Epoch Times that the Chinese Communist Party (CCP) has three insurmountable obstacles in its economy-driving efforts: lack of consumer confidence, over-load in household debt, and layoffs and low incomes caused by the CCP’s unstable policy.
China’s Economy: Lack of Consumer Confidence
Official figures show that China’s consumption growth in 2021 was lower than in 2019 before the outbreak of COVID-19. Especially sluggish are household consumption, and a negative growth in tourism, accommodation, and movie box office revenues compared to 2019.
On May 28, 2020, Chinese Premier Li Keqiang said in a press conference that China has 600 million people with low and middle incomes and that their average monthly income is only about 1,000 yuan ($158).
“Hard to imagine how consumer confidence could be supported by a monthly income of $158.” Jiang said, adding that “lying flat culture” that has become popular in recent years is a graphic reflection of the lack of consumer confidence.
“Lying flat” is a popular internet term from 2021, roughly referring to many Chinese young people who are disappointed with an economic downturn and social pressure, whose specific slogans include “no house, no car, no marriage, no baby, no expenses,” and “maintaining a minimum standard of living.”
According to data by the Bureau of Statistics, in 2020, annual disposable income per capita of 20 percent of the population, or about 280 million people, is 7,868.8 yuan (about $1,260), or an average of only 655.7 yuan (about $105) per month.
In 2021, both income and consumption growth were lower than in 2018 and 2019, the years before the pandemic outbreak, with an overall downward trend in the growth of consumer goods’ total retail sales.
Therefore, more Chinese people are choosing savings over consumption and investment, according to a questionnaire survey of urban savers in the fourth quarter of 2021 by The People’s Bank of China that was released on Dec. 31, 2021.
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