Is Consumption Upgrading or Downgrading? 18 Charts on How China Spent in 2018 | Annual QDaily Data

Upgrading and downgrading are happening at the same time — in almost every category.

On January 21, China's National Bureau of Statistics released the 2018 GDP figure: 90.0309 trillion yuan, with growth slowing from 6.8% to 6.6%.

This was treated as a big deal. Chinese growth had slowed for three straight quarters, and while the full-year rate came in better than expected, it was still 0.2 percentage points below the previous year — the worst showing since 1990.

Against a 90-trillion-yuan economy, 0.2% works out to 180 billion yuan — a staggering number by any measure. But set beside the earth-shattering headlines you read every day, it somehow doesn't seem like much.

What it actually shows is harder to say. Government-driven investment still accounted for the bulk of it. Restarted infrastructure projects, a faster flow of bank loans, and a conveniently timed revision to the 2017 figures by the statistics bureau three days earlier together pushed China's 2018 GDP growth exactly 0.1 percentage point past its stated target.

Every observer wants a Li Keqiang Index of their own to make sense of China. Consumption is the most direct thing to watch, and 2018 gave observers plenty to look at.

Fuling Zhacai, the pickled-mustard-tuber maker, saw both revenue and profit rise, and instant-noodle sales revenue turned up for the first time in five years — both cited as evidence of consumption downgrading. Geely, a mainstay of homegrown car brands, saw sales fall 40% in December 2018 and missed its full-year target.

At the same time, the Toyota Alphard, a business van priced around 800,000 yuan, still commands a 300,000-to-400,000-yuan markup to drive off the lot. On weekday evenings, the luxury boutiques on the ground floor of Shanghai's IFC in Lujiazui draw customers lining up to get in.

These are all shifts in consumption, and they pull in opposite directions. But each one is a signal that matters.

Consumption isn't just about how much you contribute to GDP. It drives the entire commercial economy.

One person's spending is another person's income. In the words of Bridgewater founder Ray Dalio, the "economy" is simply the sum of hundreds of millions of such transactions. That is why economic cycles tend to rise and fall along with consumption.

When incomes broadly shrink or stop growing, spending falls, which lowers more people's incomes, which depresses spending further. Put simply, that is how the economic cycle works.

But watching consumption can't mean only watching who buys a given product and who doesn't.

"An urban household might spend more on healthcare, education and entertainment while cutting back on everyday goods," Nie Riming, assistant dean of the Shanghai Institute of Finance and Law, told QDaily. "The former is trading up, the latter is trading down. So for a household, or a society, even when consumption is upgrading overall, trading up and trading down usually happen at the same time."

We looked at the trends in seven consumption categories, in 18 charts, to see what has actually happened to spending in China.

Upgrading and downgrading are happening at the same time — in almost every category

1. Car sales fell for the first time in 28 years — while luxury brands sold better than ever

Full-year car sales fell, the first time that has happened in 28 years.

As one of the pillar industries of Chinese manufacturing, the auto sector had long been closed to foreign majority ownership — a restriction the government only lifted in 2018, starting with pure electric vehicles. For more than 20 years, foreign carmakers had treated China as the world's most important new market, pouring money into joint ventures and new factories.

Aside from a house, a car is probably a family's biggest single purchase. For years it was seen as a symbol of consumption upgrading — people kept buying more SUVs — even though some of those SUVs were just sedans with a different shell and almost no off-road ability. Plenty of SUV owners bought one simply because a bigger car looks more impressive.

The 2018 downturn was in fact driven by falling SUV sales. In the third quarter of 2018, SUV sales growth badly trailed sedans and the passenger-car market as a whole, dropping 8.5% year-over-year in July. The most important growth engine in the Chinese car market over the past decade stalled, dragging down monthly passenger-car sales nationwide.

Data from the China Passenger Car Association shows every segment declined in 2018: sedans -4%, MPVs -20.6%, SUVs -3.1%. By manufacturer, SAIC Volkswagen, FAW-Volkswagen and SAIC-GM took the top three spots, while Toyota, the world's second-largest carmaker, fell out of China's top ten.

The association's figures are retail numbers — sales from dealerships such as 4S stores to consumers.

Gong Min, UBS's China auto analyst, said at an annual seminar that the market's slide was far worse than expected, a result both of economic conditions — the negative wealth effects of P2P lending blowups and the A-share slump — and of assorted uncertainties eroding consumer confidence.

Ordinary sedans sold poorly too. Scrapping the purchase-tax break for cars with engines of 1.6 liters or smaller hurt lower-end models. Geely, a leading homegrown brand with cars priced at 100,000-200,000 yuan, fell about 5% short of its 2018 sales target, with December sales down 40% year-over-year.

Mid-range joint-venture brands including Buick, Volkswagen and Ford suffered steep declines as well. Buick's sales fell 22% last November, Mazda's fell 42% and Ford's fell 70%.

New-energy vehicles were the bright spot. In Shanghai, buying one is the only cheap way to get a license plate; in Beijing, if you don't buy one, the average wait for a plate is seven years. New-energy vehicle sales grew 61% in 2018, but all of them together sold only 1.25 million units, 5% of total car sales.

As of 2017, China had about 160 million privately owned cars, or just over 100 per 1,000 people — far from saturation. The United States, with a population of 350 million, has 800 cars per 1,000 people.

Luxury cars, meanwhile, kept selling better. A Huachuang Securities report noted that among imported cars, vehicles with engines above 3.0 liters — a proxy for high-end demand — rose from 35.5% of imports in 2015 to 51.7% in the first half of 2018, a far bigger jump than for engines under 2.0 liters. A report from China Bond Rating made the same point with different numbers: as of the end of the third quarter of 2018, mid-size and large SUV sales were up 5.77% year-over-year, while economy SUVs fell 8.79%.

QDaily compiled sales data for first- and second-tier luxury brands including Audi, Mercedes-Benz, BMW and Infiniti, and found that most of them posted year-over-year growth in most months of 2018. A report from Evergrande Research Institute shows a similar trend: in the first three quarters of last year, combined sales of the Audi A6, Toyota Crown, BMW 5 Series, Mercedes-Benz E-Class and Cadillac XTS grew 17.1%, in sharp contrast with the overall market's -0.6%.

2. Pinduoduo gained nearly 400 million users in three years, while China was the world's biggest luxury market for a third straight year

Euromonitor data shows China overtook the United States as the world's largest luxury market in 2016, with annual transaction volume approaching 500 billion yuan. That figure was expected to grow to 550 billion yuan in 2018.

Earnings at some luxury brands bear this out. According to figures compiled by CSC Financial, in the third quarter of 2018 LVMH (parent of Louis Vuitton), Hermès, Kering (parent of Gucci) and Richemont (parent of Montblanc) all posted solid growth in China:

• LVMH: sales grew 10% to 11.3 billion euros; sales in mainland China grew 20%, contributing most of the growth in Asia excluding Japan.
• Hermès: sales grew 9.4% to 1.46 billion euros; Asia excluding Japan grew 11.8% to 519 million euros, with a rebound in mainland Chinese spending.
• Kering: sales grew 27.6% to 3.4 billion euros; Gucci grew 33.3% in Asia-Pacific, with strong results in China.
• Richemont: sales for March-September 2018 grew 24% to 6.8 billion euros, with high single-digit growth in mainland China.

At the same time, quite a few domestic Chinese brands, along with mass-market clothing brands like Uniqlo, also grew well. The retail research team at Tianfeng Securities found that over the past five years, fast fashion and high-end luxury apparel have grown fastest in China.

Uniqlo's parent, Japan's Fast Retailing, reported that in its September-November 2018 results, sluggish sales at home in Japan dragged down group earnings, but its overseas division kept expanding steadily, with sales and profit in China continuing to post double-digit growth.

In the same three years that China became the world's largest luxury market, Pinduoduo turned itself into China's third-largest e-commerce platform. Between September 2017 and September 2018, more than 386 million people bought something on Pinduoduo, a user base already on par with JD.com.

We explained the logic behind Pinduoduo's growth in detail in our year-end review. At bottom, it is doing what Taobao did 15 years ago: getting hundreds of millions of people who had never shopped online to start. The difference is that the people Pinduoduo is pulling in are mostly consumers in third-tier and smaller cities, and in the countryside.

Even so, Pinduoduo's nearly 43% combined penetration in first- and second-tier cities probably surprised plenty of people. For comparison, Alibaba's penetration in those cities is 46.7% and JD.com's is 56.8%.

Luxury spending hasn't slowed down, but people are still plenty eager for 19.9-yuan bags of oranges — 10 jin, about 5 kilograms, shipping included — 31.8-yuan hoodies and 8.9-yuan packs of 30 tissue packets.

3. Property transactions kept rising, but sales of the appliances people always used to buy when moving in fell instead

After deploying nearly every administrative tool at its disposal, China temporarily reined in the 2017 surge in home prices. The last resort was capping the price of new homes. It backfired somewhat: because capped new homes ended up cheaper than nearby resale homes, more people were pushed to buy — even when the entry ticket was a 20-million-yuan earnest deposit.

By the end of the second quarter of 2018, the property market had bottomed out and rebounded.

But the heat came and went fast. In less than a quarter, growth in nationwide new-home sales floor area slowed again. Some local governments desperate for buyers quietly relaxed their cooling measures. Loan rates, loan-to-value ratios, buyer eligibility — restrictions once tightly enforced gradually loosened.

That is the only way to attract developers, who then buy land from local governments and hand them revenue. A dead property market means losing a growth engine.

Meanwhile home appliances, whose sales in past years usually tracked new housing, failed to follow this time. Since February 2018, retail and wholesale revenue at above-scale appliance sellers had been shrinking, down 6.25% for the full year.

Upgrading was happening too. Rice cookers, electric pressure cookers and electric kettles were among the few appliance categories where both unit sales and average price rose. What they have in common is a relatively low price per item — you buy one and use it right away, and a renter can easily take it along when moving. Starting with Xiaomi and NetEase Yanxuan, and followed by the traditional small-appliance makers, companies raced to build better, more reliable versions of these products.

Consumers who actually plan to live in the homes they buy still spend on pricier, better-made goods for a better daily life. But the rise in property transactions didn't pull traditional big-ticket appliances upmarket, even though those are now far cheaper than a few years ago — a 65-inch TV for a little over 3,000 yuan, a 50-inch TV for a little over 2,000 yuan.

Which suggests the people buying homes are in no hurry to live in them. At these prices, housing is mostly an investment.

4. High-end cosmetics kept growing — and the lipstick effect isn't the only explanation

Whenever the American economy sours, lipstick sales tend to rise. Even when things go badly, consumers' appetite for a bit of luxury doesn't disappear; they shift to goods that tie up less money. Brand-name lipstick happens to satisfy that appetite for most people.

As Chinese consumers' overall willingness to spend slowed, cosmetics was one of the few categories that kept growing over the past two years.

According to the National Bureau of Statistics, cosmetics retail revenue grew 13.5% in 2017 and 10.5% over the first 11 months of 2018, both ahead of total retail sales growth of 10.3% and 9.1%. It even helped push Japan's cosmetics exports to a sixth consecutive record year.

Euromonitor data shows that since the 2008 financial crisis, high-end cosmetics' share of the Chinese market rose from 27% to 34% in 2017, a compound annual growth rate of about 11.6%. Imported cosmetics' share of total cosmetics retail sales in China has also risen, from 7% in 2008 to 25% today.

This has left international brands in charge of the Chinese cosmetics market. In 2017, the top ten cosmetics companies were almost all European, American, Japanese and Korean; not one Chinese brand made the high-end segment, while four Chinese companies — Shanghai Chicmax, Pechoin, Jala Group and Shanghai Jahwa — made the mass-market one.

As with luxury apparel, which was largely unaffected by China's macroeconomic weakness, L'Oréal, Proya, Shiseido and Estée Lauder all kept growing fast in China. L'Oréal's global revenue grew 6.16% in the third quarter of 2018, with Asia-Pacific up 26.24%. LG Household & Health Care's global revenue grew 10.6%, its China business 21.61%.

Alongside that, growth in cosmetics spending slowed sharply in the second half of the year. That may be pushing some high-end brands into lower-tier channels. Unilever, for one, moved into social-commerce reselling last October, launching its Hazeline Snow line for sale through resellers, cosmetics specialty stores and household-goods multi-brand stores.

The beauty market in lower-tier cities is seen as having huge potential. According to UnionPay and JD.com's 2017 Big Data Report on Consumption Upgrading, spending growth in third- and fourth-tier cities hit 58% last year, ahead of first-tier and new first-tier cities. Lower-tier markets once held by domestic brands such as Proya, Hanhou and Kans have drawn plenty of foreign brands. Besides Shiseido and L'Oréal, which started moving downmarket earlier, Kosé's mid-to-high-end brand Albion entered cosmetics specialty stores in third- and fourth-tier cities around 2015. Johnson & Johnson skincare brands including Dr.Ci:Labo, Aveeno and Neutrogena have moved into those stores since July this year.

Beyond how cosmetics spending shifted with the slowing economy, there is also China's crackdown on daigou, the overseas personal-shopping trade, more overseas brands entering China directly, and brands courting all sorts of more direct sales channels rather than sitting on the ground floor of a mall and declining along with it.

5. Baijiu splits into two extremes, while cigarettes sell pricier and better

By unit price, Moutai is without question still the hottest name. Demand hasn't weakened, its share price kept climbing, and the company became one of China's trillion-yuan benchmarks.

Among sub-premium brands priced above 300 yuan — Shanxi Fenjiu, Shuijingfang, Jiuguijiu and Shede Spirits — results diverged over 2017 and 2018: Shuijingfang surged and then pulled back, while Shede bottomed out and rebounded.

But baijiu is a classic market in which the consumer and the buyer are different people. Buying it as a gift is more common than drinking it yourself, especially at the high end.

The middle of the range, 30-80 yuan a bottle, barely sold at all. Further down, though, 15-yuan bottles of Erguotou were selling extremely well.

Cigarettes tell a different story. Several big cities imposed citywide smoking bans, but that did not curb the urge to smoke.

After falling in 2015 and 2016, Chinese tobacco sales are, for now, back on an upward track. Statistics bureau data shows that in the first three quarters of 2018, China's 315 million smokers bought 1.86 trillion cigarettes (about 93 billion packs) — 21.7 cigarettes a day each, 5% above expectations. Sales grew 4.14% year-over-year, above the 4% growth of the same period a year earlier.

One defining feature of cigarette sales: the share of packs priced 16 yuan and above has risen for three straight years, while the share priced 6 yuan and below has fallen for five. Several premium brands sold better too — high-end cigarettes including Zhonghua, Furongwang and Liqun sold 2.904 million cases, up 8.4% year-over-year.

China Tobacco has repeatedly talked about "upgrading the mix" — launching more new products and building up key brands, mostly mid-to-high-end cigarettes. It has advised its regional units to stop developing new third-tier-and-below products (under 30 yuan up to 130 yuan a carton). In other words, future new cigarettes will cluster in first- and second-tier products retailing above 130 yuan a carton.

According to the 2018 White Paper on Chinese Cigarette Internet Consumers, compiled by Yanzhongce, people born in the 1990s were the largest group both among buyers of low- and mid-priced cigarettes under 19 yuan a pack and among buyers of high-priced cigarettes above 90 yuan a pack — a clear sign of stratification. Across every age group surveyed, cigarettes priced 20 to 35 yuan a pack were the mainstream price point.

Rural cigarette sales have also consistently seen a bigger per-case mix upgrade than urban ones, though the gap between the two has narrowed year by year. "Mix upgrade" here means consumers moving from lower-grade to higher-grade cigarettes.

As the whole smoking population, rural consumers included, traded up, the share of low-end cigarettes priced 6 yuan or below a pack fell further, to 15%.

It is worth noting, though, that this upward shift in the low-end baseline may simply reflect price increases. Soft-pack Baisha, for instance, used to sell for 5.5 yuan a pack and now sells for 7 yuan — a 27% rise.

6. More than a billion Chinese people didn't fly last year, but travel spending in cities of every tier is growing in different directions

As the most expensive way to travel, China's commercial airlines carried 610 million passenger-trips over the past year.

But that counts trips, not people — a round trip between Beijing and Shanghai counts as two. Which means that, in the most optimistic reading, about 300 million people in China have ever flown, leaving 1.09 billion who haven't.

Li Xunlei, chief economist at Lianxun Securities, estimates that since a good share of those 600 million-plus trips came from people flying again and again — he himself flies more than 80 times a year — the real number of Chinese people who have never flown is higher still.

This kind of gap between perception and reality runs through many areas of Chinese life. Travel abroad, for instance, looks commonplace, but according to data from the 2018 National Day holiday, independent overseas travel is still largely the business of the same four big cities.

Figures released at the time by the flight-tracking app VariFlight and Skyscanner, the international flight-booking platform Trip.com Group had acquired, showed that travelers from first-tier and new first-tier cities made up nearly 90% of independent outbound trips. Beijing, Shanghai, Guangzhou and Shenzhen alone took 74.35% of the total, even though their combined permanent population is only about 5% of China's.

That doesn't mean everyone else has stopped traveling. A Haitong Securities report noted that between 2008 and 2016, high-speed rail's share of total rail passenger volume rose from 0.5% to 43%. The Beijing-Shanghai high-speed line, the busiest and most profitable route, carries more than 160 million passenger-trips and more than 12.7 billion yuan in profit a year.

Travel, too, is a hugely stratified picture. First-tier cities contribute the most outbound travelers; second-tier cities contribute the most growth in outbound travelers. And with high-speed rail spreading, third-tier and smaller cities are contributing the most growth in domestic travelers.

7. Services take a bigger share of spending — but not entirely by choice

Over the first 11 months of 2018, China's total retail sales of consumer goods came to 35.26 trillion yuan, up 9.1% — the slowest pace since December 2003. Growth in May alone was 8.5%, the slowest since June 2003.

Total retail sales of consumer goods mainly counts what individuals and businesses spend on physical goods, online and off, plus restaurant revenue. It is one of the key gauges of Chinese consumer strength.

The biggest drag on the overall number was cars. Chinese passenger vehicle sales (sedans, SUVs and MPVs) fell 5.8% in 2018 to 22.3505 million units, the first annual decline since 1990.

To sharpen the picture of consumption trends and analyze shopping habits, research houses usually split spending into "essential consumption" — necessities — and "discretionary consumption" — everything else. The first includes food, tobacco and alcohol, beverages and medicine; the second includes cars, gold and jewelry, and cosmetics.

QDaily took those categories as samples for essential and discretionary spending growth, and found that in early 2018, gold, jewelry and cosmetics briefly grew more than 20%, ahead of the essentials of food, tobacco, alcohol and clothing. But from the second half of 2018 on, discretionary spending slowed while essential spending steadied, and the two lines split apart.

CICC's analysis is that discretionary spending is easily swayed by consumer lending and correlates strongly with the growth cycle, lagging GDP growth by only a few months. Its growth in early 2018 was really a delayed reaction to the 3.5 trillion yuan of new consumer loans issued in 2017 and to GDP that had temporarily steadied. Once both faded in 2018, discretionary growth began to slide.

In theory, essential spending leans toward "survival consumption," discretionary spending toward "enjoyment consumption." Going by the trend, the second falling behind the first looks like evidence of downgrading. But as the economy develops and per-capita income rises, spending on services — healthcare, education, entertainment, travel — grows. None of that is counted in total retail sales of consumer goods.

Some economists therefore use the share of spending that goes to services to judge which way consumption is moving. By the calculations of Ding Anhua, chief economist at CMB International, and his team, since 1992 urban Chinese households' spending on services — transport, healthcare, education — has risen as a share of total spending faster than spending on goods like clothing and food, and they argue that "the give-and-take between goods spending and services spending is exactly what reflects the overall upgrading of household consumption."

But more spending on services could also just mean services got more expensive. Take healthcare: calculations by Zhu Hengpeng, deputy director of the Institute of Economics at the Chinese Academy of Social Sciences, show the medical burden on rural households growing steadily heavier over the past 16 years. For urban households, the out-of-pocket burden started rising again in 2013, and for both groups medical costs grew faster than incomes over that period.

China's changing consumption is hard to sum up as upgrading or downgrading — but the divide is clearly getting sharper

Gao Limin, a researcher at the Shanghai Institute of Finance and Law, is reluctant to call the current trend either upgrading or downgrading. He prefers to say Chinese consumption is actively diverging.

That is exactly what is happening across the categories above:

The whole car industry is shrinking, and 90% of Chinese people don't own a car — yet high-end car sales are bouncing back.

Chinese consumers bought more luxury goods than anyone else in the world, and also bought more cheap goods on Pinduoduo than anyone else in the world.

Shanghai's internet-famous shops always have a line out front, while restaurant spending in third- and fourth-tier cities has fallen short of what Starbucks and Haidilao expected.

People born in the 1990s are the largest group of buyers at both ends — cigarettes under 19 yuan and cigarettes over 90 yuan.

The macro statistics say the same thing.

In Credit Suisse's latest Global Wealth Report, as of the first half of 2018, median net wealth per Chinese adult was just $16,000, with growth stuck at 6.2% for three years running — below GDP growth.

The median says more about how most people's incomes are growing. You rank a set of numbers from high to low and take the one in the middle. Say a group of ten has one member worth 1 million yuan and nine worth 100,000 yuan each: their median wealth is 100,000 yuan, while their average, or per-capita, wealth is 190,000 yuan.

By comparison, even Europe — in the middle of Brexit, a debt crisis and a refugee crisis — has seen median household wealth return to growth.

The wealth gap in the United States is wide too: this year median individual wealth there was $61,600, while average wealth reached $403,900. But American median individual wealth resumed growing after the 2008 financial crisis, and recent years of global turmoil haven't stopped it.

China's own statistics bureau figures tell the same story. In 2013, median per-capita disposable income grew about 10.9%; by the end of 2018 it had dropped to 6.5%.

China's Gini coefficient, meanwhile, has widened almost without pause since 1997, reaching 0.49 by 2009, before easing slightly in recent years to 0.47 at the end of 2016. Among OECD member countries, China's Gini coefficient would rank roughly third from the bottom, behind only South Africa and Costa Rica. Research teams at Peking University and Southwestern University of Finance and Economics put China's Gini coefficient at 0.7 and 0.5 respectively, far above the statistics bureau's figure.

The Gini coefficient measures how evenly annual income is distributed, on a scale from 0 to 1. The smaller the number, the more evenly income is spread; the larger it is, the more unequal.

In the end, the question behind consumption is how people's money turns into more money — or whether it can at all

Whatever doubts remain about upgrading and downgrading, one thing was beyond dispute in 2018: making money got harder.

Wages are still the main source of Chinese incomes. In the first nine months of the year, per-capita disposable income from wages, business operations and property came to 11,900 yuan, 3,400 yuan and 1,700 yuan.

Putting part of your earnings into low-risk investments is what nearly every economist advises ordinary people to do. In the United States, that usually means a 401(k): setting aside the 2008 financial crisis, annual returns run around 5%, similar to the S&P 500 and sometimes a little better. Someone who starts contributing at 25 is projected to double their savings by 40 and reach five times the initial investment by 60.

Chinese people can't count on their pension to grow their wealth. It pays essentially no interest, and whether you will be able to collect it is a separate question.

Meanwhile the higher-risk investment channels available all proved genuinely high-risk in 2018.

China's stock market wiped out 15 trillion yuan of market value in 2018. Spread across 150 million investors, institutions included, that is an average loss of 10,000 yuan each — not counting losses on equity funds.

Falling average daily turnover points to a listless market: the number of investors actually trading and holding stocks is far below 150 million, which means the average loss for people who really trade is far above 10,000 yuan.

Another blow to household wealth was the wave of P2P lending collapses. BOC International once estimated that about 600 billion yuan was caught up in them.

Property used to be the most reliable personal investment in China. But over the past two years, purchase restrictions, earnest-money requirements, eligibility hurdles and soaring prices have turned it into a game only the wealthy can keep playing. QDaily covered those changes in detail last week.

Even as property investment gets harder, it weighs more heavily on middle-class spending. Growth in Chinese households' per-capita disposable income has not kept up with home prices.

At current incomes, covering just the down payment — using national average income and prices — takes the savings of about 1.5 households (a household being about 1.8 people). In first-tier cities like Beijing, Shanghai and Shenzhen, one home eats up the savings of about 2.5 households. So the line about "buying a home empties six pockets" isn't a joke.

Even for people who don't buy, rents that climb every year are a heavy burden.

Since 2011, rising housing costs have taken a growing share of Chinese households' new spending each year, reaching 32% by 2017. And the rent figures are probably understated — the recent uproar over landlords having to be named for the new personal income tax deduction is one sign of that.

All of this may in turn be pushing people to save. Since the end of 2017, the savings deposit ratio of Chinese urban households has risen from 40% to 44% at the end of 2018. More saving, less borrowing, and naturally less spending.

"The idea that we should build a consumer society is something we should be especially wary of," said Yan Se, a professor at Peking University's Guanghua School of Management and a former senior economist at HSBC. "Repeatedly pushing people to spend more, build a consumer society, save less, favor services over manufacturing, stimulate consumption, hold back investment... For a country with per-capita GDP under $10,000, these slogans are frankly absurd."

Spending comes out of income. Even with all the various forms of stimulus — credit card installments, JD Baitiao, Ant Check Later, rent paid in installments — the money spent has to be paid back eventually. If income doesn't rise, where does lasting consumer confidence come from?

Data compiled by Fangyi Gong

Charts by Xiuxia Feng

Cover image: Florian Wehde on Unsplash, Yiran Ding on Unsplash