Chinese Consumer Confidence in Focus (Part Two)

Lying flat is not only work-related, but also affects consumption

Much of the discussion below is better suited for a psychologist or sociologist. I am neither, but I can see clearly where things are going if “lying flat” continues in China.

The worst case is not people are too pessimistic. The worst case is people simply don’t care anymore.

“Ours is a big country. It is only natural for different people to have different concerns or hold different views on the same issue. What matters is that we build consensus through communication and consultation.” Xi Jinping, 2023 New Year Address

“A prominent economic and financial writer has again been suspended by Chinese social media platform Weibo for ‘disseminating negative and harmful information’ about the country’s economy, as Beijing continues to censor online speech amid a sputtering post-coronavirus recovery. Wu Xiaobo, along with two other users, [have been accused of] ‘hyped up the unemployment rate’, ‘smeared the development of the securities market’, and ‘attacked and undermined’ China’s current economic policies.” South China Morning Post, June 2023

In Part One, I talked about how low consumer confidence is holding back China’s economic recovery, and why this may be a recipe for deflation risk. Watch out!

So it seems the Chinese government doesn’t like people talking bad about the economy, which may be a recipe for disaster also.

Optimists see the glass as being half full. Pessimists see the glass as half empty. But nothing is worse than the glass “lying flat”, i.e. people don’t give a damn anymore. This could happen for several reasons, including overstress, overcontrol (censorship) and overspending.