Consumer Spending Slumps in Beijing, Shanghai

A rundown of the news making headlines in and around China:

Consumer spending tumbles: In the first 11 months of 2024, retail sales of consumer goods in Beijing and Shanghai recorded year-on-year declines for seven and nine months, respectively. The sluggish consumption data are likely a result of an outflow of high-net-worth individuals and the overall downturn in the economy, analysts said. The former follows the exit of some foreign-funded enterprises from China, severely affecting the two cities as they had a high concentration of foreign executives. At the same time, young people, who typically have stronger spending power than the elderly, may have been leaving the country’s capital and financial hub in search of work amid high unemployment. Meanwhile, anti-corruption efforts in finance have hit high-end dining hard, while salary cuts in the financial and internet industries have affected both cities due to their large share of these sectors, analysts said. In the first three quarters, the per capita disposable income of the two cities increased by 4.2% year-on-year, while the national growth rate was 5.2%.