CCP Publishes Data on Chinese New Year Holiday Spending; Economists Warn of Economic Slowdown in China
The ruling Chinese Communist Party (CCP) has shared consumption data for the Chinese New Year holiday, proclaiming that the domestic consumer market is “hot”.
Despite this claim, financial experts argue that the slumping Chinese economy is heading towards a situation reminiscent of the Great Depression (1929-39).
The CCP’s Ministry of Culture and Tourism Data Center recently disclosed that there were 474 million domestic tourism trips during the Chinese New Year holiday from Feb. 9 to Feb. 17, with domestic tourists spending a total of 632.68 billion yuan (about $87.9 billion) on travel. Key retail and catering companies nationwide saw an 8.5 percent year-on-year increase in sales.
Official CCP media asserted that China’s economy had a “good start” in the Chinese New Year based on holiday consumption data from tourism, catering, retail, transportation, and movies, among others.
The Chinese economy has continued to decline in 2023 after the CCP lifted its stringent “zero-COVID” policy control measures, subjecting the economy to a three-year lockdown. All sectors have witnessed a downturn, marked by reduced exports, stagnant domestic demand growth, significant declines in manufacturing production and sales, a collapse in real estate, and slowdowns in most service industries.
China’s stock market crashed in late January and early February, hitting its lowest index in years, with thousands of stocks reaching the limit down.
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Popular Chinese financial commentator “Da Liu Shuosuo,” with 3.84 million followers on Chinese social media, released a video online suggesting that the rebound in consumption during the Chinese New Year reflects false prosperity. The commentator described it as a “lipstick economy” where the massive consumption seen hides a much larger contraction in overall spending.
‘Great Depression Is Coming’
The Chinese edition of Voice of America published an article by Shanghai political scientist Jiang Feng (pen name) this month, titled “The Great Depression is Coming: The Historic Moment of ‘Shanghaiization’.”
The article described a peculiar atmosphere on the eve of the Chinese New Year, with Chinese people witnessing what appears to be the onset of the Great Depression. Early closures of businesses and factories before the holiday, increased industry depression, and a rise in incidents of bosses fleeing without notice or payment have become prevalent, as noted in the article.
Various Chinese citizens have taken to social media platforms to voice their experiences of industry downturns, including store closures, plummeting real estate values, high unemployment rates, and significant losses in stock trading.
Upon returning to work after the Chinese New Year, many individuals across the country shared on Chinese social media the permanent closures of the companies or factories they worked at post-holiday.
The VOA article highlighted China’s increasingly insular economic model, driven by political powers rather than a free market, leading to a decline in both the economy and the political landscape. It suggested that the empty promises from Chinese officials are the underlying cause of an inevitable “Great Depression” in China.
Prominent Chinese financial influencer “Magical Blue” outlined the main issue facing the Chinese population as an excess of three major capitals stemming from a crisis of confidence.
Other concerns have been raised by the international community about China’s economy resembling the root problems of the Great Depression in the U.S., especially the decline in bank lending and the lack of confidence.
Fang Xiao contributed to this report.
