I don't understand. Prices is not rising very much and they are already so low. Wages grow much faster. Even housing price is cheaper. But people are just so pessimistic nowadays. Seemed like customer perception just got worse and life is much harder while it should be the opposite.
Chinese Economics Thread
- Thread starter Norfolk
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The voucher program in the last two years pulled demands forward. It is expected.
Yes consumer confidence in china is really really low for some reason . Consumption hasn’t really picked up from a few years ago . The government really needs to do something about this to bring back consumer confidence . They can’t keep relying on exports which is what is holding Chinas economy at the moment , else without that growth would probably be around 3% which is alarming .
I think it is because the income is increasing but the wealth (or perception of it) is not. Wealth in china is equivalent to real estate. Before the real estate crashing, people actually feel wealthier (except the young people) as you can just buy a house and see your asset skyrocketted. That make people spend more. I'm not saying house price should increase but people lack a channel for investment and wealth creation.
Well, if it's real estate then it should be self-correcting as the prices reach bottom and turn upwards again.
Looking at correlation, it seems that retail sales did recover in first half of 2025, coinciding with the house pricing slide briefly holding around 0%.
So it will be interesting to see if this can be the case again, perhaps in early 2027.
Problem with this correlation is that if people start opening their purse it can lead to both higher house prices and higher retail sales, so you can't know if it's a cause-and-effect relationship.
Yeah, the problem is all of this would cost an insane amount of money that the government doesn't have.
All of this stuff we've exactly talked about before. Judging from what the government says it looks like they know what the right track is. We just need to see the plans unfold. There's little news on alternative investments. It looks like they hate that. Which may or may not bite them in the future. Just how much welfare can China give over a billion people without going bankrupt? Would it even be remotely effective? I still believe that alternative investment vehicles would be a more viable strategy for China right now. All this subsidization and then going for welfare spending is just sinking it more into debt. At least alternative investment strategies can allow citizens' massive savings go into something productive instead of just the governments'.
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Ahh yes, the famous quarterly half percentage point miss forecast of doom in China yearly GDP. Interesting the quiet when do surpass the forecast.
That is the beautiful thing with bubbles, you are "wealthy" on paper until you are not. That why you see so many panic selling in global markets these days, people are trying to cash out a soon as possible, especially smart people who know that the AI bubble wont last. The ideal condition will be sustainable long term growth were the market go up and down according to market conditions.