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China – five consumption myths

The first of two videos on consumption. This one looks at recent trends, arguing spending has been stronger than often realised. It still isn't high enough, especially given the huge shock from Trump's tariffs. So the second discusses policies that would boost consumption further.

Paul Cavey

• 1 min read
China – five consumption myths

Chapters

00:00 - Introduction

00:13 - Why Chinese Consumption Matters

01:44 - Myth 1: Consumer Confidence = Spending?

03:15 - Myth 2: Retail Sales Tell All

05:19 - Myth 3: Consumption Hasn’t Recovered

07:23 - Myth 4: No Spending on Services

09:08 - Myth 5: Rising Savings = Weak Consumption

11:51 - Consumption’s Share of GDP

13:22 - Wrapping Up: Cyclical Recovery Confirmed

15:12 - Outro: What’s Next?

If you prefer to read, this is a longer note on consumption that I wrote late last year:

China’s Consumption Challenge | China Leadership Monitor
With consumer confidence collapsing and retail sales barely growing, it has become common to think that consumption in China is suffering from a cyclical crisis that is intensifying the economic difficulties caused by the property slump. The reality is different, however, with consumption in China regaining its pre-Covid trend, a recovery that is rare among the major economies. This bounce back has been made possible by the normalization of the spike in savings seen during the pandemic. With the
China LeadershipPaul Cavey

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