As China's consumer economy slows, individuals across the country are tightening their belts—not by choice, but by necessity. In this face-to-face conversation, a 34-year-old office worker shares how her personal spending habits have changed, reflecting the deeper malaise in China's consumer landscape.
Q: Can you tell us how your shopping habits have changed in recent years?
A: Absolutely. Two or three years ago, I used to browse JD.com regularly. I wouldn’t say I was lavish, but I felt a little proud of buying good-quality items—electronics, daily needs, a few clothes. JD made me feel like I was making stable, sensible choices.
Last year, I switched to Taobao to cut costs. At first, it didn’t feel like a big deal, but lately even that feels like a luxury. Now I’m on Pinduoduo. I shop there almost every week, and I’m constantly comparing prices across platforms. If something costs 9.9 yuan, and I find the same for 9.8, I’ll return the first and buy the cheaper one. Every mao counts.
Q: That sounds like a dramatic shift. What pushed you to become so cost-conscious?
A: It wasn’t one big moment—it was a slow squeeze. My salary hasn’t changed much since 2021, but prices keep inching up. My rent, groceries, transport—it all adds up. At the same time, I’ve seen friends laid off. The job market feels uncertain, and promotions are rare. It makes you think twice before spending.
It’s not about being stingy—it’s about survival. You never know what’s around the corner anymore.
Q: Are you seeing similar behavior in others around you?
A: Definitely. I talk with friends online and offline. Everyone’s cutting back. And not just on shopping—on life. A few years ago, going out to a KTV or grabbing drinks after work was normal. Now? Most people just go home. I read online that the number of KTV venues has dropped from 150,000 to 40,000. That’s insane.
Bars, restaurants—even shopping malls—they’re all emptier. It’s not that we suddenly stopped enjoying ourselves. We just can’t afford to enjoy ourselves like we used to.
Q: How does this change in lifestyle make you feel, personally?
A: It’s strange. On one hand, I’ve become more mindful. I’m saving more, planning better, being less impulsive. But on the other hand, it’s demoralizing. Life feels smaller, narrower. It’s not just about money—it’s about hope. We used to believe things would get better. Now we’re just trying to hold on.
Q: What’s your outlook for the future? Are you hopeful?
A: I try to stay practical. I’m not expecting things to improve quickly. People talk about GDP growth, but it doesn’t feel real on the ground. We’re not seeing the benefits. Jobs are scarce, housing is risky, and prices aren’t low enough to match our incomes. I’m just taking it day by day, doing what I can.
Hope? Maybe. But it’s not the same hope we had a few years ago. It’s a quieter hope—a hope that things at least won’t get worse.
Q: What would you want policymakers or economists to understand about people like you?
A: I wish they understood how much people are struggling quietly. On paper, everything looks stable, but we’re living in a different reality. We don’t need slogans—we need solutions. Affordable healthcare. Job security. A social safety net that works.
It’s not about stimulating the economy. It’s about restoring trust in the future.
This is not just one story. It's a reflection of a broader trend unfolding across China. As the economy enters an era of stagnation and uncertainty, the voices of ordinary citizens are vital in understanding what "consumer confidence" really looks like on the ground.
"Welcome to China’s Consumer Winter.""It’s not cold because people don’t want to spend. It’s cold because they can’t."
2025 Reality Check: Are People in China Actually Getting Poorer?
Yes, bluntly put, they are. Incomes are stagnating while the ability to earn and spend shrinks. The opportunities that fueled China’s economic boom for decades have faded. Economists warn of a systemic crisis driven by five interlocking forces, each compounding the others.
1. Eroding Confidence: From Spending to Saving
China’s once-vibrant consumers are now cautious hoarders. Psychological deflation—expecting worse days ahead—has taken root. The pandemic’s scars, coupled with policy uncertainty and regulatory crackdowns, have shattered optimism. While Western economies indulged in post-COVID spending sprees, Chinese households saved ¥18 trillion in 2022, followed by another ¥10 trillion in early 2023.
Young people, once the heartbeat of consumption, are retreating. Graduate unemployment has spiked, pushing many to rely on parents or delay life milestones like marriage. The “lying flat” movement reflects their disillusionment. The middle class, battered by real estate losses and stock market dips, has joined the frugality wave, cutting back on travel, education, and luxury goods.
Businesses are no better off. Private investment has stalled, with entrepreneurs hoarding cash rather than expanding. Surveys show firms slashing jobs and avoiding hires, feeding a deflationary spiral where fear stifles spending.
2. The Debt Quagmire: Stimulus That No Longer Works
China’s debt-fueled growth has hit a wall. Total credit is projected to reach ¥408 trillion by late 2024—over 300% of GDP. Each unit of GDP growth now demands over five units of debt, an unsustainable ratio. Household debt, much of it tied to housing, has climbed to 115% of disposable income. Local governments grapple with ¥60 trillion in hidden debt, forcing salary cuts and delayed payments.
Traditional fixes—rate cuts, liquidity injections—fall flat. With credit demand vanishing, money sits idle in banks, never reaching the real economy. Local governments, unable to borrow more, can’t rely on infrastructure spending to spark growth. The old playbook is obsolete.
3. Real Estate: From Foundation to Financial Sinkhole
Real estate, once 25% of GDP and 80% of household wealth, is crumbling. Since 2021, developer defaults, unfinished projects, and plunging prices have eroded trust. Property values in some towns have collapsed, dragging millions into financial insecurity.
With 70% of household wealth tied to housing, falling values make people feel poorer, so they spend less. Even steep mortgage rate cuts haven’t revived sales. The dream of ever-rising home prices is dead, and with it, a key driver of domestic demand.
4. Demographic Decline: A Shrinking Workforce
China’s population is aging rapidly. The workforce has been shrinking since 2010, and by 2050, 30% of the population will be seniors. Birth rates hit a record low of 6.8 per 1,000 in 2022, despite government incentives for marriage and childbirth. High costs and shifting values keep fertility rates falling.
A demographic cliff looms. Between 2025 and 2035, 300 million workers—roughly the U.S. population—will retire. Pension systems are strained, and healthcare costs are rising. Younger generations face crushing burdens, squeezing disposable income and consumption for decades.
5. Policy Stagnation: A System at Odds with Itself
China’s leadership has been slow to act. A revealing moment came when President Xi reportedly asked, “Isn’t it good when things get cheaper?” Policy responses have been tepid—limited monetary easing, minimal fiscal stimulus, and scattered interventions instead of bold reforms.
China’s governance model prioritizes industrial investment and stability over consumer welfare. Direct cash transfers to households are absent, and transparency is waning. Youth unemployment data was halted, fiscal risks are obscured, and “deflation” is rarely mentioned officially. This avoidance stifles meaningful reform.
Global Challenges: No External Lifeline
China’s export-driven growth is faltering. Demand from the U.S. and Europe is down, with exports to the U.S. dropping 30% year-on-year. Global firms are shifting supply chains to Vietnam, India, and Mexico, with companies like Apple and Nike reducing reliance on China. Idle factories add to the deflationary pressure.
Despite a ¥992 billion trade surplus in 2024, the numbers mask weakness—driven by falling imports and domestic contraction, not strength.
The Long Freeze Ahead
China’s era of debt-driven growth is over. Demographic decline, shattered confidence, a broken housing market, unsustainable debt, and hesitant governance point to prolonged stagnation. Some predict structural deflation could persist for 30 years.
The formula that powered China’s rise—youthful demographics, cheap capital, and global trade—is gone. Recovery demands a reimagined economic and social framework. Until then, people will keep hunting for that 9.8 yuan deal, holding tight to every cent in an increasingly uncertain world.
Disclaimer:
This blog post is intended for informational and analytical purposes only. The views expressed are based on publicly available data, expert opinions, and social observations China as of 2025. It does not represent financial advice or official economic forecasts. Readers are encouraged to conduct their own research and consult experts before drawing conclusions or making decisions based on the content presented here.
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