1/
China's consumption story isn’t just about low confidence or state incentives. Some policy-linked categories are now outperforming on the back of real household demand, especially in services like education, transport, and daily life. The shift may be uneven, but it’s taking root.
Real income rose +5.4% YoY in H1, and rural households outpaced urban (+6.2% vs. +4.7%).
But with property income still soft (+1.4%) and median urban income at just 88% of the average, caution lingers.
Discretionary goods like clothing (+2.1%) and alcohol (+2.5%) remain weak.
China's consumption story isn’t just about low confidence or state incentives. Some policy-linked categories are now outperforming on the back of real household demand, especially in services like education, transport, and daily life. The shift may be uneven, but it’s taking root.
Real income rose +5.4% YoY in H1, and rural households outpaced urban (+6.2% vs. +4.7%).
But with property income still soft (+1.4%) and median urban income at just 88% of the average, caution lingers.
Discretionary goods like clothing (+2.1%) and alcohol (+2.5%) remain weak.
2/
Beneath the cautious tone, a quiet shift is underway.
H1 data show outperformance in education/culture/entertainment (+11.8%), daily services (+9.0%), and transport/communications (+8.4%) - areas Beijing has also tipped as 2H consumption engines.
In other words consumption may be rebalancing - not rebounding - as lifestyles and state priorities change.
Beneath the cautious tone, a quiet shift is underway.
H1 data show outperformance in education/culture/entertainment (+11.8%), daily services (+9.0%), and transport/communications (+8.4%) - areas Beijing has also tipped as 2H consumption engines.
In other words consumption may be rebalancing - not rebounding - as lifestyles and state priorities change.
3/
Implication:
Household demand for home-bound experiences and services aligned with state-led directions is already outpacing traditional categories. Surveys show rising interest in wellness, experiential spending (e.g. “revenge travel,” dining out, entertainment), health, leisure, and digital connectivity - suggesting that the state-backed old‑for‑new --> services shift is moving in parallel with real consumer behavior.
Implication:
Household demand for home-bound experiences and services aligned with state-led directions is already outpacing traditional categories. Surveys show rising interest in wellness, experiential spending (e.g. “revenge travel,” dining out, entertainment), health, leisure, and digital connectivity - suggesting that the state-backed old‑for‑new --> services shift is moving in parallel with real consumer behavior.
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