Here’s how China’s 1.4 billion people are spending again after the pandemic
Bloomberg:After years of lockdowns and pandemic restrictions, China is back — but are its millions of consumers? The answer affects the fate of businesses, the outlook for global inflation and will be a factor in whether the world economy goes into a recession, reports TBS.
China’s population is emerging from a massive virus wave unleashed by the rapid reversal of Covid Zero in mid-December. People are planning trips, dining out and returning to shopping malls.
Still, residents of the world’s second-biggest economy aren’t splashing out like they used to, with extreme pandemic measures — and the economic uncertainties that accompanied them — casting a long shadow.
How “open” is China, really?
Three months on, we take the temperature on the ground:
1. Dining and Entertainment Chinese consumers are venturing out again after three years of unpredictable restrictions that confined many to their homes. That’s being seen partly in increased dining out. Spending on food and drink at restaurants is edging back toward pre-pandemic levels, but is yet to top it. Haidilao, one of China’s biggest hot pot restaurant chains, is estimated to have seen daily sales over the crucial Lunar New Year holiday period in January above where they were last year — when Covid curbs stopped many people from reuniting with their families. Yet sales at restaurants serving the fiery broth, a popular communal dining activity, lagged far behind 2021, when the country was effectively in a bubble with China’s borders shut to keep the virus out. Fear of Covid among Chinese consumers is “dissipating,” said Catherine Lim, Bloomberg Intelligence’s senior analyst for consumer and technology. But concern over the outlook of the economy “is now prompting them to exercise greater caution in discretionary spending,” she said. The New Year break provided a burst of consumption in many sectors, but that momentum trailed off amid lingering concerns about Covid, rising flu cases and anxiety over where the economy is headed post-lockdowns.
That was seen clearly at the box office. Chinese flocked to movie theaters during the seven-day holiday, with ticket sales hitting 6.8 billion yuan ($990 million), up 15% from the same period of 2019.