China’s middle class growing desperate and anxious about US trade war impact

Fears of trade war impact also appear to be affecting willingness to spend and prompting moves to safeguard wealth in foreign currencies and gold

Rising food prices and unemployment levels adding to concerns despite state and social media urging nation to stand strong in face of adversity

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Food prices jumped 6.1 per cent in April due to higher pork and fruit prices, with pork price increases accelerating to 14.4 per cent from 5.1 per cent in March. Photo: Reuters

Published: 12:00pm, 27 May 2019Updated: 12:50pm, 29 May 2019

China’s middle class, particularly better-educated white collar workers, are growing increasingly confused and anxious over how the trade war with the United States will affect the lives of ordinary citizens, in contrast to official press and social media which have been dominated by messages urging the country to stand strong in face of the adversity.

Concerns about the impact of the trade war, combined with rising food prices, are already affecting consumers’ willingness to spend, which could cause a further deceleration in Chinese economic growth.

These concerns may also increase efforts by the upper and upper middle classes to safeguard their wealth by buying gold or foreign currency and moving their wealth abroad.

For China’s urban middle class, who have benefited from the country’s economic boom in the last few decades and may have taken it for granted that life would be better, the intensified rivalry between China and the US is bringing a strong sense of uncertainty about their future, pushing citizens to scramble for any information about the trade war away from the official propaganda rhetoric.

“Please tell me the proper understanding of what the impact of the trade war will be on the lives of ordinary people like us. Thanks!” wrote Su Gengsheng, a popular online writer and blogger with more than 300,000 followers on China’s largest social media platform Weibo, four days after the US raised tariffs on US$200 million of Chinese imports.

The post was unusual for Su’s extremely non-political account after she rose to popularity with cosmetics recommendations and make-up tips. However, the trade war question seemed to speak to the heart of the concerns shared by many of Su’s followers, and rapidly attracted thousands of replies and likes as well as more than 10,000 shares. Comments on the post were soon blocked because they “violated relevant laws and regulations”, although the original post was still visible.

Despite a lack of access to uncensored news, the adverse effects of the trade war have started to be felt and are rapidly becoming known throughout Chinese society. This is especially true for those who now have things to lose, including the value of their stocks and real estate, the chances of sending their children to study in the US, or even just being able to watch the final season of Game of Thrones on television.