Coronavirus: China’s consumers will not rescue economy when outbreak is over, survey shows
- China has repeatedly said that the impact of the coronavirus will be short-lived and that it is still on track to achieve its economic development goals in 2020
- But 31.4 per cent of respondents to a survey conducted by Rong360.com said they would not increase consumer spending after the outbreak
Around a third of Chinese consumers will not increase spending once the outbreak of coronavirus has been brought under control, a private survey has shown, challenging Beijing’s hope that consumer expenditure will quickly rebound to cover losses suffered amid the epidemic.
However, according to the online survey conducted by Rong360.com, a Beijing-based firm providing financial and credit information and products, 31.4 per cent of respondents said they would not increase consumer spending.
More importantly, nearly two thirds, or 64.4 per cent, said they would be more “restrained” in spending in the long term, while another 12.6 per cent said they would cut spending, with only 11 per cent saying they would increase expenditure. The remaining 12 per cent said they would keep their lifestyle unchanged.
For short-term spending, 68.6 per cent of respondents said they would increase expenditure after the epidemic, especially on entertainment, cosmetics, catering, movies, massages, fitness and sportswear.
The survey offers another glimpse into the cost of the coronavirus, with China’s National Bureau of Statistics expected to publish the official purchasing managers’ index on Saturday, which will be the first official indicator to measure China’s economic situation.
China regularly does not publish investment, production or retail sales statistics for January and February due to the Lunar New Year holiday, and will instead publish combined figures in March.
Consumption contributed 57.8 per cent of the country’s economic growth in 2019, but since the outbreak in the central province of Hubei in January, consumer spending has been hit hard with most the population placed under various lockdowns and restrictions.
On Friday, China International Capital estimated that China’s retail sales could shrink 2 per cent year-on-year in January and February, following an 8 per cent rise in December.
“The hit on discretionary consumption and offline service may be the most obvious,” the investment bank said.
The Rong360.com survey found that the coronavirus has particularly hit sentiment among China’s middle class.
While more than 80 per cent of people with a monthly income of more than 30,000 yuan (US$4,300) plan to increase spending in the short term, the middle-income group, or those with a monthly income of between 15,000-30,000 yuan, showed the most reluctance, with only 58 per cent set to increase spending once the outbreak is over.
A separate online survey of 5,859 households indicated similar change in consumption habits as a result of the coronavirus.
Around 38 per cent of people surveyed said they would save more in the future, while another 20 per cent will try to earn more, according to a joint survey released on Thursday by Data100 Insight, a market research agency, and The Economic Observer.
Over 20 per cent of respondents said they would refrain from overspending, “avoid front-loaded consumption”, and cut discretionary consumption, according to the survey.
A total of 56 per cent said they would cut spending on luxury goods, while another 42 per cent would travel less, according to the survey.
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