“The good days aren’t coming back. I have to try something else now,” she added.

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China’s slowing economic recovery has added to Lin’s decision as disappointing manufacturing activity, exports data and youth unemployment failed to back up better-than-expected growth in the first quarter.

The slowdown, partially driven by weak overseas demand, has forced a large number of Chinese factories and traders to put investment on hold, and instead focus on reducing operating costs, shutting down production lines and cutting jobs.

“Traditional manufacturers I know saw their orders drop by 40 per cent or more so far, compared to the same period last year, and we feel more pessimistic with our expectations for the coming months,” said Wang Jie, an original design manufacturer focused on the footwear industry in Dongguan, Guangdong province.

“Take my factory for example, there will be no new orders at all starting next week.”

Wang’s factory now employs predominantly casual workers, with the number of full-time staff reduced by around two-thirds from last year to less than 20.

Factories are also switching to smaller premises, according to Wang, but such moves are being made at the cost of quality, meaning products will struggle to pass European and American standards.

“The boss already has no other way to solve the cash flow problem,” added Wang after watching a neighbouring firm move into an old tin factory.

High inventories are also causing problems after three years of coronavirus-related curbs and restrictions clogged supply chains, which are affecting investments.

“Companies are changing from going after high quantities to setting their minimum order quantities, which means suppliers or manufacturers will ensure profitability and justify the costs associated with producing or delivering the products,” said Paul Tai, the regional director at Mainetti Retail Solutions Worldwide, which operates production lines in eastern and southern China.

“In that case, companies will focus on upgrading their operations and investing in different capacities, e.g. software that helps digitalisation.

“[The fashion industry] accepts the fact that the overall global demands will decrease by 20 per cent in the coming three years. Instead of pouring money to expand their facilities, the trend will turn to strong companies acquiring small companies. More precise investment considerations will be made.”

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The new energy vehicle manufacturing industry is also feeling the strain of a weak domestic market.

“We were producing at full capacity in January. But in the first quarter, the capacity was at an average of less than 60 per cent, and it is expected to rise to only nearly 80 per cent in June,” said an after sales engineer at a Guangxi-based automotive components firm, who asked not to be identified as they are not authorised to speak to the media.

“The main reason is that the domestic auto brands are very competitive, and there is a lot of pressure on material inventory as our clients’ sales performance is not as good as they thought.”

Many individuals are also tightening their belts in preparation for a prolonged period of economic weakness, showing growing caution in their personal investments.

Zhu Rui, a Guangzhou-based retired businessman, sold a two-bedroom property in Guangzhou last month for 4.7 million yuan (US$657,000) due to the continually glooming market.

“I am still satisfied with the deal, although it is actually lower than last year’s market price of around 5.3 million yuan, I think the price will continue to fall in the future,” said Zhu.

He swapped 3 million yuan into a three-year fixed deposit with an interest rate of 3.25 per cent, while he plans to buy short-term US dollar-denominated financial products with the remaining income from the sale.

“I am also more cautious about China’s stock market and other investments in the domestic market. Every day I see more lay-offs and pay cuts occur in growing industries and companies,” Zhu added.

People are also reluctant to make significant expenditures despite a pickup in less expensive items such as dining and travel since China’s reopening late last year.

“Fundamentally, the confidence of the Chinese people is low due to the uncertainty about the economic recovery,” said Xu Bin, a professor of economics at China Europe International Business School.

“They had hopes for an economic recovery in the few months after the abandonment of the strict pandemic-control policy in November last year, but gradually they realise that economic recovery is not coming with this policy switch.”

“The pandemic was a major reason for the toughness of China’s economy, but it has become increasingly clear that there are deeper reasons for the Chinese economy to be weak this year and possibly in the years ahead,” Xu added.

“Until the Chinese people’s confidence comes back, it is rather hard to imagine that the Chinese people will suddenly spend on big items (for example houses, cars and luxuries) again.

“The confidence relies on positive expectations for future economic growth, which hinges on the commitment of the Chinese government to pro-growth policies.”

But cosmetics producer Kelly Fang does not expect too much for the upcoming June 18 online shopping festival, with the 618 event seen as the second-most important e-commerce in China after Singles’ Day in November.

“Last year, the annual 618 shopping festival caused us to suffer serious losses due to Covid-led lockdowns, but to my surprise, it turns out that this year is even worse, judging from the presale situation,” she said.

Fanny Fang, a middle manager at one of China’s leading sofa makers which sells more than half of its products to the domestic market, saw her company suffer negative growth in the first quarter after a disappointing 2022, which has resulted in “small-scale lay-offs”.

“We need to pay 200,000 to 300,000 yuan for one session of live streaming by top livestreamers like Li Jiaqi, but the profits we make from selling in such a session may not be able to cover that cost,” said Fang, referring to social media influencer Li, who is also known as China’s “Lipstick King”.

“We’ve seen some signs of recovery since May, but it’s still a very difficult year in general.”