Health · Europa Today
A China-Africa liner carrying 23,800 tons of mechanical equipment and engineering vehicles set sail from Yantai Port to Ghana on September 3, 2026. For years, China's weak consumer spending has underpinned many conversations around the country, despite persistent export growth. The domestic sales challenge has become more pronounced and globally relevant.
Consumers in China have good reason to be cautious. For years, their disposable income grew at more than twice the rate of U.S. consumers, with annual growth around 10% until 2020, compared to the U.S. average of 3%. However, this growth has slowed drastically in recent years, with 4.3% in 2025, barely surpassing the U.S. rate of 3.8%. A key factor is the sharp decline in home prices, which have fallen back to 2016 levels, erasing 85% of gains made between 2012 and 2021. This decline is sharper than the 47% drop during the U.S. housing bust. Macquarie’s Larry Hu noted that China’s housing market outlook depends heavily on exports driving growth, signaling domestic challenges are attracting global scrutiny.
The Group of 20 finance ministers' meeting in the U.S. intensified debate over whether China’s economic policies have negatively impacted jobs in other countries. A joint statement called for China to remove distortions that constrain domestic consumption, though Beijing objected, drawing criticism from U.S. Treasury Secretary Scott Bessent.
China’s imports surged in June at their fastest pace in five years, but this hasn’t narrowed its trade surplus significantly. A heat wave in Europe has driven up exports of air conditioning units by over 40%, contributing to record-high exports. Despite U.S. and EU tariffs, China’s exports grew sharply in June, surpassing estimates in July.
Zong Liang, former chief researcher at the Bank of China, stated that China did not intentionally boost exports. While Beijing has announced policies to boost domestic demand, it may take five years to see results, and increasing household income remains challenging. The average U.S. consumer has significantly more disposable income than their Chinese counterpart ($66,871 vs. $6,463).
One policy option is encouraging investment in the domestic stock market, particularly in new tech names. However, retail investors face skepticism due to past market crashes, such as the 2015 CSI 300 plunge. Cultural differences in saving and consumption habits also affect spending patterns, with education, healthcare, and travel prioritized over entertainment and shopping.
China’s role in global trade, particularly in manufacturing goods but not buying them, is drawing new scrutiny. Over 75% of global trade consists of goods, and China’s outsized production role is increasingly under examination.
Additionally, a French-American company’s new programmable personal robot, powered by a Shanghai-listed chip using British company ARM’s tech, highlights the interconnectedness of global tech supply chains. Shares of retail giant Shein have struggled post-Hong Kong debut due to tightened U.S. and EU import rules. Meanwhile, China’s President Xi maintained a distance from Iranian President in meetings ahead of a potential Trump summit.
Source: CNBC