China’s first quarter consumption numbers make for bleak reading. Amid the coronavirus epidemic, urban consumption expenditure fell by 9.5% year on year, down from a 7.5% expansion in 2019. Unsurprisingly, education, culture and recreation were the hardest hit sectors, with services that require a physical presence, not possible under lockdown measures, seeing the largest contractions. 

China’s first quarter consumption expenditure, in addition to the outlook for the remainder of 2020, are explored in greater detail in a recently published report by the EIU. Key findings from the report are:

• Services consumption dropped significantly in the first quarter of 2020, but spending on necessities, such as food and accommodation, continued to rise. Meanwhile, household savings grew. 

• Despite a slight recovery, retail sales will contract in 2020 as a whole. Recovery will be seen in the second quarter but will remain in contraction compared to the same period in 2019, as unemployment peaks.

• Government stimulus measures, such as car subsidies and digital coupons, will be insufficient to reboot consumption in 2020.

•  The coronavirus (Covid-19) epidemic will accelerate the trend of consumption shifting online, with spending already flourishing in the online food delivery sector.

Download the full report: Chinese consumers emerge from Covid-19.

The analysis and forecasts in our full report comes from the EIU’s award-winning Access China service. Access China is the only single source of data, analysis and forecasts for the world’s largest emerging market at provincial and city levels. Whether you plan to sell to, invest in or expand into China, our service could help your organisation understand the business environment, identify current and future opportunities and monitor what businesses are already doing across various regions.