China’s consumption expected to further recover

With China implementing optimized COVID-19 control measures, its capital Beijing has seen a rebound in contact-based consumption in recent days.

Customers queued up for dine-in services in front of several restaurants on a street in Chaoyang district, Beijing on Dec. 23.

Photo shows moviegoers at Wanda cinema at Wanda Plaza, located in the Central Business District (CBD) in Beijing, Dec. 22, 2022. (People’s Daily Online/Xia Xiaolun)

“I planned to eat hotpot at the hotpot restaurant Haidilao with my friends, but we had to wait for about one to two hours, so we decided to come to this restaurant,” said Li Jin, who came to eat hotpot with his friends.

On Dec. 24, a long queue of customers waited at the door of the Sam’s Club warehouse store in Daxing district, Beijing. “It’s good to see that the usual vibrancy has come back to our store,” said a staff member there, adding that about 20,000 customers visited the store the previous day.

Movie theaters have also seen more customers. “After the launch of the latest 10 measures for optimizing the epidemic response, more and more people have watched movies here. Recently, about 800 to 1,000 people have been watching movies here every day,” said a staff member of a movie theater in Beijing, adding that there were even more moviegoers over the weekend.

Data from box office tracker Maoyan showed that 62.16 million people watched movies in theaters on Dec. 24 across China, up 182.92 percent from the same day last month.

This year, the epidemic’s short-term blow to China’s market sales has been severe. In the first 11 months of 2022, retail sales of consumer goods were down 0.1 percent year-on-year.

Beijing’s consumption situation in recent days may indicate that there is great potential for the consumer market to recover as the impact of the pandemic fades.

The continuous optimization of China’s epidemic control policies will help promote the recovery of offline consumption, according to a report from Everbright Securities.

Wu Yifan, deputy director of Huachuang Securities Research Institute, predicts that the adjustment of epidemic control policies will effectively boost the recovery of consumption. Food and beverage consumption will become the first to see recovery, followed by accommodation, tourism and air travel, Wu added.

As the optimized epidemic control measures have been implemented, policies to expand domestic demand and promote consumption will pay off, said Fu Jiaqi, a statistician with the Department of Statistics on Trade and External Economic Relations under the National Bureau of Statistics of China.

Fu added that the consumer market will continue to show resilience, consumer demand will be further released, and market sales are expected to steadily recover.

“In 2023, per capita consumer spending is expected to grow by 8 percent to 12 percent, and retail sales of consumer goods are forecast to expand by 7 percent to 11 percent,” said Wu Chaoming, chief economist at the Chasing International Economic Institute.

Experts predict that the recovery of consumption and the expansion of domestic demand will become important forces ensuring economic recovery and growth in 2023.

China recently unveiled a guideline aimed at further expanding domestic demand to boost consumer spending across the board by 2035. The Central Economic Work Conference held earlier this month demanded that recovery and expansion of consumption be prioritized.

Industry experts said these signals of consumption being promoted mean that more policies and measures aimed at expanding consumption will be implemented.