On August 21, 2023, the day before the Tanabata Festival, a larger-than-life rose is on display in Nanjing, Jiangsu Province, China.
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BEIJING – Consumer spending picked up in August after a weak July, according to a survey of Chinese companies released by China Beige Book on Thursday.
According to the report, sales in all five categories – apparel, automobiles, food, furniture and appliances, and luxury goods – increased significantly this month compared to July.
This is based on a survey conducted between August 17 and 25 of 1,300 companies, most of which were not state-owned.
Retail sales slowed to 2.5% in July from a year earlier, raising concerns about China’s future economic growth. The National Bureau of Statistics has also released retail sales figures for the service industry since the beginning of the year, which increased by 20.3% compared to the previous year.
China Beige Book’s report said that in August, “the service sector’s ‘revenge spending’ basket remained strong, with travel and chain restaurants maintaining high growth momentum and sales surging in the hospitality sector. ” he said.
Domestic travel increased rapidly this summer. Nomura analysts found in a report Monday that the seven-day rolling average for domestic flights remains more than double what it was in August 2019.
The China Beige Book survey also found that corporate borrowing is rapidly increasing as the cost of capital falls.
This is in contrast to July’s credit statistics, which showed weak demand for borrowing money for the future of households and businesses in the same month.
Other data for July paints a dire picture. In a report distributed on August 15, JL Warren Capital estimated that: Louis Vuitton Sales in mainland China fell 5% to 10% in July, the first year-on-year decline this year.
The report said the decline from the beginning of the month to August “accelerated but is likely to narrow as China V-Day on August 22 approaches.”
The Chinese version of Valentine’s Day, known as the Tanabata Festival, is usually celebrated with gift-giving and going out to dinner.
In recent weeks, the Chinese government has announced a number of economic support measures. Because of its targeted nature, it fell short of the expectations of many investors looking for a large stimulus package.
The CKGSB Business Conditions Index, another business survey released in mid-August, reported a reading of 50.9 in July, slightly higher than the 50.02 recorded in June.
“After months of downward trending numbers, even this slight increase in confidence is welcome,” the CKGSB report said. The July employment statistics were 54.2, the same as June. A number above 50 indicates hope for an increase.
The official unemployment rate for people working in China’s urban areas has hovered just above 5% in recent months. Unemployment rates for young people aged 16 to 24 are skyrocketing. The Office for National Statistics did not release figures for July and announced it would suspend data reporting.
real estate
According to the latest China Beige Book survey, “employment growth accelerated again in August, with hiring accelerating in all sectors except real estate.”
However, China’s large real estate sector continued to deteriorate in August, the survey found.
House prices have barely increased and are on the verge of falling, the study found. The analysis quotes real estate agents as saying home sales “dropped dramatically” in August.
Much of the wealth of Chinese households comes from real estate. The sector has languished in recent years amid a government crackdown on the industry’s high debt levels.