Time flies, and we have ushered in the Chinese New Year of the Dragon. When looking back on 2023, we find that although China has relaxed its control of the epidemic, the domestic economy has also grown rapidly. However, last year, the revenge consumption and revenge buying expected by all sectors of society did not appear. However, it has ushered in some social problems such as retaliatory deposits, real estate adjustments, and difficulty in finding jobs. It seems that it will take some time to fully return to the pre-pandemic state.
After entering 2024, many people reported that they had not made much money since last year, but there were some "abnormal" phenomena in society, which are: 1. The deposit interest rate has declined, and residents' enthusiasm for saving money is high; 2. Favorable policies for bailing out the market continue, but the real estate market continues to be sluggish; 3. After the three-child policy was liberalized, the people's fertility desire continued to decline; 4. People's consumption demand continues to be sluggish. Let's break it down:
Abnormal phenomenon 1: the deposit interest rate has fallen, and residents' enthusiasm for saving money is high
Starting in 2023, major domestic banks have begun to cut interest rates continuously. After entering 2024, the interest rate on 3-year bank deposits has fallen to less than 3%, and the interest rate on 1-year bank deposits has fallen to less than 2%. However, residents' enthusiasm for saving money has not diminished but increased, and even many young people have joined the team of saving money. There are two main reasons for this:
One is that after more than 3 years of the epidemic, many people are worried about unemployment, illness and other emergencies in the future, so everyone wants to deposit money in the bank in case of emergency; The other is that now, there are losses in bank wealth management products, and many risk-averse investors can only deposit their money in the bank, at least the principal and interest will suffer significant losses.
Abnormal phenomenon 2: The bailout policy continues, but the real estate is still sluggish
Starting from 2023, the domestic real estate market has entered a trend of rapid adjustment, and various domestic policy good news has been continuously introduced. And after 2024, except for some banks, the interest rate on the first home loan will be reduced to 36%, like Suzhou, has also fully liberalized the purchase restriction policy on the property market. The Shanghai area has also relaxed the purchase restriction policy for non-registered singles outside the outer ring. Despite the continuous benefits of real estate bailouts, house prices in various places in January this year continued the previous trend.
In this regard, the real estate market has lost its money-making effect, and investors choose to wait and see; On the other hand, the people's confidence in the property market is insufficient. Some of these developers have defaulted on their debts and are not finished, which has led to concerns among many potential home buyers, who are worried that they will also run into unfinished properties. Of course, there are also some buyers who are worried that after buying off-plan properties now, developers will cut corners, so that the quality of newly built commercial houses will be affected.
Abnormal phenomenon 3: After the three-child policy was liberalized, the national desire to have children continued to decline
In 2023, the number of newborns born in China will be only 9.02 million, and the birth rate will be 639, and the natural population growth rate is -148‰。The main reasons why people are reluctant to have children are: 1. The cost of marriage is too high, and many people have no money to get married; 2. The reason for high housing prices leads to the heavy burden of young families and the reluctance to have more children; 3. The cost of raising a baby is too high, and various parenting costs and education costs cost at least hundreds of thousands, which makes many families reluctant to have more children. Obviously, domestic residents are reluctant to have more children, or because of lack of money.
Abnormal phenomenon 4: People's consumption demand continues to be sluggish
Since last year, after China relaxed the epidemic control, many experts have **, there will be retaliatory consumer demand. But in fact, the retaliatory demand of Chinese residents only occurs in low-end markets such as catering and tourism, while consumer demand in mid-to-high-end fields such as luxury goods, automobiles, and household appliances continues to be sluggish, and many manufacturers are discounting**.
This is mainly due to the fact that many middle-class families in China have reduced their incomes or lost their jobs, and they have begun to reduce their consumption demand in the middle and high-end sectors. It seems that if national consumption demand is to be comprehensive, it is still necessary to increase the income of residents and restore people's expectations for future income growth. If the income level of the people does not rise, it is not realistic for them to increase demand in the consumption sector.