Since the beginning of this year, despite the rapid growth of the domestic economy, the GDP growth rate in the first three quarters reached 52%, but the people's consumption demand continues to decline. The revenge consumption that experts had expected did not come as expected. Some scholars believe that Chinese residents do not have no funds in their hands, but have chosen to reserve funds in banks. However, in fact, due to the obvious gap between the rich and the poor in the country, only a few people have accumulated a large amount of savings, while the vast majority of people's monthly income is used for daily expenses, plus they have to repay mortgages, car loans, etc., and they cannot save at all.
The situation is not incomprehensible. After more than 3 years of pandemic control, many families have not been able to increase their income during this time. At the same time, household spending continues to rise. While bank deposits are growing rapidly, it is mainly a handful of wealthy people who are saving on a large scale. In fact, people really don't have much money in their pockets today, which can be seen from the following five aspects.
First, low-cost cigarettes are the most sought-after
Nowadays, many smokers across the country tend to choose those low-priced cigarettes for a few dollars a pack. In the cigarette hotel, these low-priced cigarettes are more likely to sell well, while those high-priced cigarettes seem to be unpopular. Many old smokers are no longer able to afford tobacco** due to their gradually decreasing income. Therefore, everyone strives to choose those low-priced cigarettes for a few bucks. Obviously, judging from the fact that smokers are actively reducing their consumption, they are really facing financial constraints, otherwise who would want to choose to smoke those cheap cigarettes?
Second, people are becoming more and more enthusiastic about online shopping
In recent years, more and more people have begun to love online shopping. According to the data released by the China Internet Network Information Center (CNNIC), as of June 2023, the scale of online shopping users in China has reached 88.4 billion people, an increase of 38.8 million compared to December 2022.
In fact, the reason why most people have joined the online shopping army is not only because of the quality of the goods they buy online, but also because they really want to save money. Although the Internet is full of goods and counterfeit products of poor quality, even so, many people still choose to shop online, which also reflects the "lack of money" problem behind the people.
Third, I also started to save money when buying groceries
In the past, many people were reluctant to go hungry even if they were poor, so even if their income was not high, their budget for groceries would never be saved. But in the past two years, when shopping for groceries, I suddenly found that customers began to tighten their wallets, and the number of groceries they bought decreased little by little, for fear of waste. This shows that the economic situation of the common people has indeed reached a very difficult point.
Behind this phenomenon is a reflection of the change in people's consumption concepts. They began to focus on saving money and trying to reduce waste in order to better cope with the lack of money on hand.
Fourth, everything that can be used is insisted on
Nowadays, we often see many people still using their old mobile phones, and some families are still driving old cars. Especially for those old appliances that are still working properly, many people would rather stick with them than rush to replace them. This phenomenon is partly influenced by the reduction in economic income caused by the pandemic and the cautious attitude towards non-essential spending, but also because people are worried about the future problems such as unemployment, illness, pension, etc., so they want to save some money for emergencies.
Even more remarkable is the uncertainty of the future, which makes them more economical and rational in managing their money. They are willing to spend their limited financial resources on necessities in real life, and for some alternative items, they are more inclined to extend their lifespan and avoid unnecessary expenses. Against this backdrop, people's consumption levels have further declined, and their wallets have become more compact.
Fifth, the pressure to repay the mortgage is too great
Due to the high housing prices, many families need to take out a bank loan when buying a house. Before the pandemic, mortgage spending could have accounted for 40% of a household's income. In the wake of the pandemic, mortgage spending has accounted for more than 60% of household income due to reduced incomes. Many families spend almost all of their income on mortgage payments, leaving enough disposable income to cover basic living expenses, and that will continue for many years to come. In this case, almost all the money in the pockets of the indebted families is used to repay the loans, and of course there are fewer and fewer funds at their disposal.
Finally
We believe that the main reason for the sluggish consumption in today's society is that everyone's income is decreasing, the economy is under pressure, and they are all budgeting. Therefore, no matter how much you try to stimulate consumption, it will be futile. Only by allowing the broad masses of the people to regain disposable funds and stimulate the circulation of funds can the economy usher in an upturn. life