China Consumer Spending Slumps Under Covid and Property Restrictions

Chinese consumer spending is buckling under the country’s dual campaigns against rising property prices and Covid-19 outbreaks, flashing a warning for global companies that have pinned their hopes on a more free-spending Chinese customer, the Wall Street Journal reported. Retail sales unexpectedly dropped last month and are expected to continue to struggle as Chinese authorities launch wide-ranging lockdowns to contain the latest fastest-spreading Covid outbreaks, and as easing measures do little to reverse a worsening property market meltdown. Online commerce giant Alibaba Group Holding Ltd. posted a surprise net loss last week, just days after breaking with precedent by not disclosing a sales figure for its annual Nov. 11 Singles Day shopping extravaganza. Meanwhile, the slumping property market, the primary store of wealth for many Chinese households and a contributor of roughly a quarter of overall growth, according to some estimates, shows no immediate sign of easing as a monthslong slide in home prices accelerated in October. While Beijing unveiled new loosening measures earlier this month to mitigate the toll of the policies, authorities in both cases reaffirmed the core principles underpinning their strict approaches to controlling property prices and the pandemic. “These are difficult issues that will take a while to resolve,” said Duncan Wrigley, chief China economist at Pantheon Macroeconomics. Read more. (Subscription required.)