This year’s Qixi Festival in China, a holiday celebrating love and loyalty, was marked by a noticeable decline in consumer spending and festive spirit. In previous years, young couples would show off expensive gifts on social media, but this year, people complained about the lack of gift-giving and blamed a sluggish economy and tough job market. Owners of flower shops also reported a lack of customers and unsold roses, highlighting the economic challenges facing the country.
The drop in spending during the Qixi Festival aligns with a broader trend of weak consumption over the past two years, with consumer confidence in China at a record low. The lackluster mood is not only affecting businesses but also the Chinese government’s efforts to encourage marriage to address falling birth rates and an aging population. The declining population is expected to be a drag on economic growth, with fewer couples getting married in recent years.
The general pessimism in China is reflected in trade and economic data, with imports of jewellery-grade diamonds declining and foreign direct investment dropping significantly. The weak job market and real estate issues have contributed to low consumer confidence, impacting global companies like L’Oreal and carmakers Volkswagen and Mercedes. The outlook for the Chinese economy remains challenging, with companies expecting continued struggles in the second half of the year.
The significance of the Qixi Festival, which has been celebrated for thousands of years, has evolved from a marketing opportunity for companies to a barometer of consumer confidence in China. Global CEOs can no longer rely on China as a commercial stalwart due to the low consumer confidence and economic challenges facing the country. The government’s efforts to boost consumer spending and encourage marriage as a means of stimulating economic growth have been hampered by the prevailing negative sentiment among young people struggling to find jobs and manage debt.
Overall, the sentiment in China during this year’s Qixi Festival was marked by pessimism and a lack of festive spirit, reflecting broader economic challenges facing the country. The decline in consumer spending, weak job market, and real estate issues have contributed to low consumer confidence, impacting global businesses and the government’s efforts to boost economic growth. The outlook for the Chinese economy remains challenging, with companies expecting continued difficulties in the coming months.
