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Recently published consumption data for November 2024 has shown a rapid decline in consumer confidence in Beijing and Shanghai.
This is in contrast to China as a whole, which saw a modest increase in retail sales in November, with a year-on-year growth of 3%, driven largely by strong automotive sales—surging by 16.5%—and restaurant sales which grew by 4%.
Yet, Beijing and Shanghai tell a very different story. Over the first 11 months of 2024, consumption in these two major cities declined by 2.8% and 3.1% respectively.
In November, this decline turned into a sharp collapse.
Beijing’s total retail sales of consumer goods fell to approximately $17.5 billion (¥127.5 billion), marking a steep 14.1% year-on-year drop. Shanghai fared no better, with its total consumer spend reaching approximately $19.8 billion (¥144.3 billion), but still experiencing a significant 13.5% decline.
In November, the retail sales growth rates in Beijing and Shanghai declined to -14.1% and -13.5% respectively.
11月北京、上海社零增速分别下降14.8个、24.4个百分点至-14.1%、-13.5%.
Note: 社零 shè líng means "total retail sales of consumer goods" (short for 社会消费品零售总额)
This collapse in consumer spending is wide-ranging: Beijing’s restaurant revenue fell by 4.2%, while retail sales plunged from a modest 1.4% growth last year to a stark 14.9% contraction. Meanwhile, Shanghai saw even steeper declines, with retail and apparel sales dropping by 20.3% and 7.4%, respectively.
These sharp declines are part of a larger trend of "consumer downgrading" (消费降级), evident in other areas as well. For example, in Shanghai, the rise of budget “group take-out” (拼好饭) services reflects shifting consumer priorities, which also saw over half of the city's high-end restaurants closing down over the past year.
This exposes the financial pressures faced by people living in these cities such as the fall in foreign investment, talent flight due to the high cost of living, the lack of graduate employment opportunities, and young homeowners becoming over-leveraged, or even homeless due to the ongoing crisis in the property market.
Even the 'lipstick effect' (口红效应), where consumers typically turn to small indulgences during economic downturns, has not materialised in China as it has in other economies.
Consumer data for 2024 reveals a significant drop in discretionary spending, with cosmetics seeing the largest decline—a year-on-year decrease of 26.4% in Beijing and Shanghai.
This highlights the growing pessimism surrounding the future of China's economy.
This shows that people’s pockets are empty, and their confidence in the future is completely gone.
这说明了老百姓的钱包真的是见底了，而他们对未来的信心，早已荡然无存。
But this is just one short-term consequence of a broader economic downturn, as one finance blogger suggests:
Weak consumption is not just a short-term issue—it reflects a long-term structural flaw.
For years in China, there has been an emphasis on investment and production, while the importance of consumption has been neglected.
Some even believe that consumption is merely frivolous spending that makes people lazy—which is completely misguided.
但消费的疲弱，不只是短期出现的问题，而是长期的结构性短板，因为我们一直以来都重视投资重视生产，但却忽视消费的重要性，甚至有人觉得消费就是吃喝玩乐就是不利于奋斗，这个理解是完全错误的。[2]
So that’s what we’re exploring this week!
🎧 Member Podcast Preview: This week, we explore the fascinating world of talking about data in Chinese and learn how to describe numbers that shock, impress, or meet expectations. We’ll cover the basics like “harsh” or “alarming” (刺眼) vs. “brilliant” (亮眼) and dive into advanced idioms such as “stunned” or “speechless” (瞠目结舌) vs. “falling within expectations” (中规中矩). Tune in at the 5-minute mark to master these key phrases!
Favourite Five
1. 低迷 dī mí
economic downturn
房地产行业的低迷，必然会引发一系列经济连锁反应 - The downturn in the real estate industry will inevitably trigger a ripple effect across the economy. [3]
Related:
萎靡 wěi mǐ – sluggish, dispirited
乏力 fá lì - lack of strength, sluggish
疲弱 pí ruò - weak, sluggish
2. 衰退 shuāi tuì
decline, recession
当这些行业开始衰退的时候，自然就会降薪裁员 - When these industries begin to decline, salary cuts and layoffs are to be expected. [2]
Related:
颓势 tuí shì - downward trend, decline
3. 雪上加霜 xuě shàng jiā shuāng
to make things worse
雪上加霜的是，年轻人的就业机会正在急剧减少 - To make matters worse, job opportunities for young people are rapidly decreasing. [3]
4. 荡然无存 dàng rán wú cún
completely gone
他们对未来的信心，早已荡然无存 - Their confidence in the future has long since vanished. [3]
More: Read more about this idiom in the Sinica Phrase of the Week on Sunday.
5. 消费降级 xiāo fèi jiàng jí
consumption downgrade
也只有走上消费降级，扩大食客基础的道路 - The only way out is to embrace the consumption downgrade and broaden their customer base. [1]
More: We have discussed this phrase a number of times in 2024, for example in relation to China’s property crisis.
Related:
平替 píng tì - affordable alternative
理性消费 lǐxìng xiāofèi - rational consumption
可选消费 kě xuǎn xiāo fèi - discretionary spend
Consuming the Conversations
Useful words
6. 刺眼 cì yǎn
harsh, glaring
可北京和上海的数字却特别刺眼，双位数下跌 - However, the numbers in Beijing and Shanghai are particularly glaring, showing double-digit declines. [1]
7. 缩水 suō shuǐ
shrink, devalue
京沪的中产在房产缩水、就业前景不明的状况下的消费降级 - The middle class in Beijing and Shanghai is experiencing consumption downgrade due to shrinking property values and uncertain job prospects. [1]
Related:
萎缩 wěi suō - shrink, atrophy
8. 杠杆 gàng gǎn
leverage, financial leverage
买套很普通的房子就可能需要贷款几百万，居民杠杆压力是非常大的 - As residents may need to take out a mortgage of several million yuan to buy any flat, they face enormous financial pressure. [2]
9. 扛鼎 gāng dǐng
bear the burden, take the lead
居民这几年已经开始牺牲消费来扛鼎了 - In recent years, residents have begun to lower their consumption to bear the (financial) burden. [2]
More: This is an interesting phrase! We explain more in the Member Podcast!
10. 崩塌 bēng tā
collapse, crumble
最富裕的两座城市的消费市场已经遭遇崩塌 - The consumer markets in the two wealthiest cities have already collapsed. [3]
11. 活路 huó lù
a way out
许多人甚至不得不离开北京、上海，去往其他城市寻求活路 - Many people have even had to leave Beijing and Shanghai to make a living in other cities. [3]
12. 窟窿 kū long
hole, deficit
靠发放消费券来弥补这笔窟窿，真的能行得通吗 - Can issuing consumption vouchers really fill in the gaps? [3]
13. 返贫 fǎn pín
return to poverty
