Tag: Consumer Behavior

How China Made Its Housing Crisis Worse

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In China the pension akin to Social Security in the United States pays about $410 a month to seniors who live in cities, and only $25 a month in the countryside. Public health care covers less than half of people’s costs. Unemployment insurance provides around $220 a month; the U.S. average is nearly $1,700. China’s consumer safety net is full of holes, even when accounting for lower costs of living compared to the United States. As growth has faltered in recent years, and now as a simmering real estate crisis…

Chinese Confidence Hits Low Point Because of Nation’s Economic Troubles

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When their government abruptly ended its harsh Covid measures in December, many Chinese expected a robust rebound from pent-up demand. Eight months later, China is instead facing an accumulation of bad news: record youth unemployment, a deep housing slump, stagnant spending, even deflation. That’s a shock to many Chinese who are used to an economy that kept on expanding and living standards that rose with it. Now they’re contending with slowing businesses and shrinking personal fortunes. I talked to over a dozen business owners and consumers, as I have been…

China Faces a Crisis in Its Real Estate Sector

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A model Chinese property developer in a sector replete with risk takers is teetering on the edge of default. Short of cash, one of China’s biggest asset managers has missed payments to investors. And billions of dollars have flowed out of the country’s stock markets. In China, August has been a dizzying ride. What started three years ago as a crackdown on risky business behavior by home builders, and then an ensuing housing slowdown, has spiraled rapidly this month. The broader economy has been threatened, and the confidence of consumers,…

China’s Woes Loom Large Over the Global Markets

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What’s behind the August sell-off? Goldman Sachs economists see an end to the Fed’s hawkish policy on interest rates, predicting that the central bank will cut its prime lending rate in the second quarter of next year. But that bullish prediction is doing little to restore investors’ optimism, as concerns mount about consumer confidence and the health of global economy. China’s woes are reverberating. The country, a major engine of growth, has been rocked by a decline in trade, a slowdown in consumer spending, a crackdown on the private sector…

China Details Plans to Stimulate Consumer Spending

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Chinese drivers who trade in older cars for newer models will be eligible for subsidies, as will rural households that buy insulation and other home renovation materials to improve energy efficiency. Entrance fees at scenic sites will be cut to promote tourism. Those were a few of a long list of measures detailed on Monday by the Chinese government in an effort to stimulate consumer spending. Attempts by officials in Beijing to juice the economy have taken on greater urgency as it has become clear that the recovery is flagging.…

China’s Biggest Banks Cut Deposit Rates to Spur Consumer Spending

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Why It Matters A reduction in the deposit rates is one lever that policymakers can use to stimulate spending. The hope is that the lower rates will give consumers an incentive to spend or invest money instead of parking their savings in the bank. The move is an indication that consumer spending, a key driver of economic growth, remains sluggish. After China scrapped its Covid restrictions late last year and reopened the economy, there were expectations that pent-up demand would push consumers to start spending freely — but that has…

Tesla Car Sales Rose 18% in Last Quarter

Chin@Strategy

Tesla said Monday that it delivered 405,000 electric cars during the last three months of the year, an 18 percent increase from the previous quarter that fell short of analyst estimates and may reinforce investor fears that the electric car company is losing momentum. Wall Street analysts had predicted that Tesla would sell around 420,000 vehicles from October through December, up from 343,000 vehicles in the third quarter. The company sold a total of 1.3 million cars in 2022, a 40 percent increase from the year before. That was short…

How Will China Turn Its Economy Back On? The World Is About to Find Out.

Chin@Strategy

For months, investors and C.E.O.s waited anxiously for China to ease up on its Covid restrictions, which burdened the economy and were out of sync with the rest of the world. Stock markets rallied on mere rumors of policy changes. Companies warned that “zero Covid” was hurting business. Now that China has finally started rolling back its strict mix of mass testing, lockdowns and quarantines, its economy is entering a delicate period when it will face a set of challenges that do not fit neatly with other countries’ experiences during…

For Olympic Sponsors, ‘China Is an Exception’

Chin@Strategy

At the bottom of the slope where snowboarders will compete in the 2022 Beijing Olympics, an electronic sign cycles through ads for companies like Samsung and Audi. Coca-Cola’s cans are adorned with Olympic rings. Procter & Gamble has opened a beauty salon in the Olympic Village. Visa is the event’s official credit card. President Biden and a handful of other Western leaders may have declared a “diplomatic boycott” of the Winter Games, which begin next week, but some of the world’s most famous brands will still be there. The prominence…

China’s Economy Slowed Late Last Year on Real Estate Troubles

Chin@Strategy

BEIJING — Construction and property sales have slumped. Small businesses have shut because of rising costs and weak sales. Debt-laden local governments are cutting the pay of civil servants. China’s economy slowed markedly in the final months of last year as government measures to limit real estate speculation hurt other sectors as well. Lockdowns and travel restrictions to contain the coronavirus also dented consumer spending. Stringent regulations on everything from internet businesses to after-school tutoring companies have set off a wave of layoffs. China’s National Bureau of Statistics said Monday…