BEIJING- Per capita spending in China fell 0.2 percent in real terms last year as harsh COVID curbs took their toll on consumer appetite, marking only the third such decline since records for that data began in 1980.
The drop followed a jump of 12.6 percent in 2021, figures from the National Bureau of Statistics (NBS) showed. That in turn was a rebound from a decline of 4 percent in 2020 during the initial throes of the coronavirus pandemic.
China’s economy grew just 3 percent in 2022, one of its weakest levels in nearly half a century with the country only deciding late in the year to abandon draconian zero-COVID policies aimed at stamping out every outbreak.
As a result, income per capita in China grew by just 2.9 percent in real terms, the second smallest rise since 1989 and retail sales fell 0.2 percent, the second worst performance since 1968.
Xu Tianchen, an economist at the Economist Intelligence Unit said, a steep drop in income growth for China’s lowest income earners was a key factor behind the weak spending data.
“Before the pandemic, the lowest income group was one of the fastest growing, but now, quite remarkably, it has become the slowest income group, dropping from 10.1 percent (income growth) to 5.2 percent.”
Unadjusted, income per capita in China grew to 36,883 yuan ($5,310) last year, while spending per capita increased to 24,538 yuan ($3,533), the NBS said.
Rural areas performed better than urbanized zones, with the incomes of rural households growing by 4.2 percent in real terms on the year, compared with 1.9 percent growth in real terms for urban residents.
Urban employment dropped by 8.4 million last year, marking its first decline since 1962.
Gross domestic product (GDP) grew 2.9 percent in October-December from a year earlier, data from the National Bureau of Statistics (NBS) showed, slower than the third-quart er’s 3.9 percent pace. The rate still exceeded the second quarter’s 0.4 percent expansion and market expectations of a 1.8 percent gain.
Beijing’s sudden relaxation of stringent anti-virus measures has boosted expectations of an economic revival this year, but it has also led to a sharp rise in COVID cases that economists say might hamper near term growth. A property slump and weak global demand also mean a rebound in growth will be heavily reliant on shell-shocked consumers. — Reuters
