A consumer boom and bullish spending have heralded the Year of the Ox.
Data released by the Ministry of Commerce showed that the retail and catering sectors enjoyed a Lunar New Year shot in the arm with close to a 30% rise in 2021.
But the numbers have to be put into the context of last year’s Covid-19 lockdown after the SARS-CoV-2 virus first surfaced in the Chinese city of Wuhan.
Twelves months later, there were travel restrictions imposed on millions of people to curb further outbreaks as staycations became all the rage.
“Last year was highly unusual, complicated [by] domestic and international macro-environment, especially due to the serious impact from Covid-19. The pandemic hit the consumer market like never before, with the total retail sales of consumer goods falling by 20% compared to the same time in 2019,” the Ministry of Commerce said, referring to the 2021 jump in spending.
- Chinese consumers spent about 821 billion yuan or US$127 billion on shopping and dining during this year’s Spring Festival holiday.
- That was an increase from last year but still below the 2019 figure of more than one trillion yuan or $160 billion, according to government data.
- Sales reported by key retail and catering companies came in at 821 billion yuan or $127 billion between the seven days starting on February 11.
- Again, that was an increase of 28% compared to 2020.
- Digital home appliance sales were also up by around 29% while spending on clothes doubled.
- The jewelry sector, though, was the big winner with sales surging by more than 160%.
What was said: “The nation’s consumer market has shown many new characteristics and changes,” the Ministry of Commerce concluded, referring to strong online demand.
Reaction to the news: “The economic situation down the road is still uncertain. It is likely to improve if the containment measures can again put Covid-19 under control,” Natixis, the multinational bank, said, referring to the coronavirus pandemic and the vaccine roll-out.
China Factor comment: Consumer confidence has held up in China as the economy continues to purr along. But domestic consumption will need to expand again to make President Xi Jinping’s dual circulation policy work.