For residents and business owners in Chetun, a working-class neighborhood in Shanghai’s southwestern suburbs, signs of an economic downturn are everywhere. Factories that once recruited workers from all over the country have moved. Those who remained had their wages cut. Around affordable eateries and motley shops that were once bustling with workers, employees eagerly grab onto passers-by.
“Obviously nobody has money right now,” said Cherry Chian, 25, as she sat inside her electronics store, which was the only customer on Sunday afternoon. Told.
But there is one place where the economic downturn is less obvious. That’s the government explanation.
There is a chasm between what many Chinese experience about the Chinese economy and the Chinese government’s narrative about it, and the chasm is only widening. For many ordinary Chinese, the worst economic slowdown the country has faced in decades has led to widespread pessimism and resignation. But state media and government officials continue to affirm that any difficulties are mere gossip.
Concerns about the economy have been described by Western politicians and the press as “cognitive war.A social media account backed by a Chinese state-owned broadcaster said, video The report was intended to explore how the foreign press compiled statistics that predicted higher economic growth, only to be able to say later that China had failed. was. China foreign ministry spokesman: ‘In the end, they are destined for a real slap in the face’ Said This month we’re talking about the West’s alleged naysayers.
If the reality turns out to be too inconvenient, another approach is to simply cover it up, as China did when it stopped publishing record youth unemployment this month. . The decision was widely derided by Chinese social media users, who joked that the government had finally found an effective solution.
In China, which has a tightly controlled censorship system, the difference between the official and field narratives is nothing new. But at a time when national gloom is so pervasive, from wealthy elites to factory workers, the contrast is particularly stark.
The housing crisis has shaken many middle-class Chinese who have poured their life savings into apartments. Government crackdowns on white-collar sectors, from education to technology, are fueling job cuts at big companies. Foreign companies are pulling back from investing in China, with fewer factory jobs, plummeting worker salaries and lower consumer demand.
“I tried many times but couldn’t find the job I wanted,” said 19-year-old Zhu Xunyang, who was looking for a summer job at a Chetun factory on his way home from college. Either the pay was too low or the factory didn’t need him, he said.
“So I kind of wanted to quit,” he said, playing games on his cell phone at his parents’ hardware store. “And I did.”
Many skeptical or outright disparaging comments about the economy on social media escape censorship, perhaps because it’s so common.
“That feeling of insecurity is now almost universally shared across all walks of life in China,” said Chen Zhiwu, a professor of finance at the University of Hong Kong. “That is why the government has used all official media and all other tools to convey a positive and optimistic message.”
This sense of stagnation compares to the optimism felt by many Chinese earlier this year after the Chinese government finally abandoned coronavirus restrictions that had kept many people stuck in their homes and discouraged spending for three years. is particularly pronounced.
Mr. Chen, an electronics store manager, hoped to buy a new car before his wedding later this year. But she’s seen the business run into a deadlock, she said last year she saw about 20 customers a day, but she’s dropped that idea.
“It’s to prevent risks,” she says. “In the past, you could buy a house as an investment. Now no one dares to buy a house, and no one buys something big casually.”
A few blocks away, Zhang Jiajuan and her husband were mixing chives and meat for orders yet to be fulfilled at a dumpling shop, wondering if people would dare to buy even a small one.
They never intended to be entrepreneurs. Last year, they worked in auto parts factories, earning between $800 and $1,000 a month, about the average per capita income in Shanghai. But this spring, wages dropped to about $550, so low that the couple decided to start their own business. They invested about $27,000 of their life savings in the years before the pandemic thinking about the vibrant crowds that filled the narrow storefronts selling noodles, spicy duck necks and roast meats. .
“Then we found that the economy was bad here too,” said Zhang’s husband, who gave only his last name.
“People don’t spend their money like they did before the pandemic, buying whatever they want,” Zhang said as her teenage son bent over one of the empty tables, fiddling with his phone. said.
They have also cut back on their own spending. Xue said he basically stopped buying fruit and limited himself to staple foods and vegetables. “I thought that if I got through those three years and worked hard, there was definitely hope,” he said. “And after the pandemic ended, it turned out to be even worse.”
Officials acknowledged that the economy was facing new challenges and described the recovery as “waves” while maintaining their view that the overall outlook was positive. But economists said the relief package they proposed was unlikely to work.
Despite encouraging consumers to spend more, the government rejects the idea of cash transfers to households. too expensive. Despite continuing to erode an already weak social safety net, it has branded tax incentives for buying new homes, making many Chinese reluctant to buy expensive homes.
On Monday, the Ministry of Finance cut taxes in half About stock trading to increase investor confidence. But that won’t solve the problem of people’s reluctance to buy stocks in the first place, given their lack of belief that stocks will appreciate in value, Chen said. costs you charge. “
He added that a “disconnection” “clearly exists” between the top leadership and the reality of many Chinese people.
The government’s claim that external factors are to blame for the economic slowdown certainly has its backers. Chetun city barber Wang Ainian pointed to reports of a trade war between the United States and Japan. limit When asked why the performance of local factories slowed down, he said it was about exporting computing chips.
The economic pain is also spread unevenly across the country. The wealthy, who are more insulated from uncertainty, continue to spend on things like: luxury goods. Many shopping malls and train stations are bustling again, but most shoppers and travelers are cutting back on spending and choosing cheaper destinations. For some low-income Chinese, pessimism about the recent economic downturn has softened as they are well aware of the plight.
But even for Mr. Wang, there was little hope that whoever was responsible for the financial pain would turn around soon. He visited about two-thirds of his customers last year, half of his pre-pandemic levels. And it wasn’t his hometown in the inland province of Anhui, but a world-class city like Shanghai.
“Shanghai was a place people dreamed of, and the population was growing all the time,” Chedun said. “But not now.”
For some, the official explanation hardly fits. A few blocks away, a 33-year-old clothing store owner surnamed Tan said he doesn’t care about economic news. However, she spent a lot of time on her Instagram-like Chinese social media her platform, her Xiaohongshu, trying to gather business tips from other clothing store owners. But most of their posts lamented how bad their business was.
Lee Yu Contribute to research from Shanghai, Chao Shiyi from Seoul.