The Chinese economy is suffering from the strict corona restrictions in the country. These clearly weighed on consumer spending last month. As a result, it was possible to travel less during the holiday period, and significantly less was spent in the catering industry.
The steam has also been lost in China’s sizeable industry lately.
Retail sales rose just 2.5 percent last month compared to the same month in 2020, while economists had generally expected a plus of about 7 percent. Industrial production in the Asian country grew by 5.3 percent in August, the weakest pace in more than a year.
The Chinese economy recovered remarkably quickly from the economic slump at the start of the pandemic last year. But momentum has waned in recent months as companies in China grapple with local virus outbreaks, which in turn are causing supply disruptions.
Raw material prices have also risen abruptly, and there is a worldwide chip shortage. In addition, social restrictions related to the rapid spread of the Delta variant of the virus are also unfavourable for the hospitality and entertainment industry.
According to experts, the new figures are a disappointment. “Until now, the markets have significantly underestimated the magnitude of the slowdown,” said economist Lu Ting of Hong Kong investment bank Nomura.
The developments coincide with a series of tough government measures. According to the experts, this puts additional pressure on consumer confidence. This also slows down investments in construction, for example.