This year’s Qixi Festival, China’s equivalent of Valentine’s Day, saw a significant decline in spending on romance, reflecting the country’s economic woes. Fewer young people are splurging on gifts, dinners, and getaways, citing financial struggles and a tough job market.

Sluggish Economy and Weak Consumer Confidence

China’s economic growth has slowed, and consumer confidence is at a record low. The lackluster mood is affecting businesses, from cosmetics to cars, and the government’s efforts to encourage marriage and address falling birth rates.

Data Reveals Decline in Spending

– Retail sales rose only 2.7% in July, slightly beating forecasts.
– Housing prices fell 4.9% in July, hitting a fresh 9-year low.
– Imports of jewelry-grade diamonds declined by 28% in the first half of the year.
– Direct investment liabilities dropped by almost $15 billion in the April to June quarter.

Global Businesses Sound Alarm

– L’Oreal CEO Nicolas Hieronimus cited weak job market and real estate woes for low consumer confidence.
– WPP reported a 24% plunge in second-quarter revenue in China.
– Volkswagen and Mercedes expressed similar concerns about China’s economy.

Expert Insights

– Alfred Wu, associate professor at the Lee Kuan Yew School of Public Policy, noted that young people are struggling to find jobs and are becoming more conservative in their spending.
– Yeap Jun Rong, market strategist at IG, said consumer confidence is hovering around record lows.