The idea that Chinese people would spend loads of cash when there was zero-Covid was a common assumption up until recently, according to Ana Garcia-Herrero, an international economics professor. Though this seems like it may be the case, Chinese people were far less eager to jump into an all-out spending spree, as they were more concerned how the falling prices of houses would affect their savings.
It was believed across the globe that after the pace of the pandemic began to decrease, consumers in China would start to splurge on luxury items, such as travelling to Paris to visit the Eiffel Tower. But this isn’t quite the case, as Herrera points out. Many Chinese citizens, despite the idea of a affluent spend, have chosen rather to be highly prudent with their money.
The pandemic has had a detrimental effect on the economic market in China, as global growth has decreased and consumer activity has lowered. With the prices of properties on the decline, and the cost of materials on the rise, many Chinese households are now feeling the pressure, as their current assets become more at risk.
The data from various economic sources is now showing that Chinese citizens are, in fact, living far more frugally than they had prior to the pandemic. This means they are avoiding unnecessary purchases, buying less food and entertainment, and making fewer trips to stores. Although the overall Chinese population has experienced losses in their net worth amount, they are still determined to do whatever they can to remain in a financially secure position.
With their newfound financial stability, Chinese citizens are likely to be far more aware and responsible when it comes to their spending. Money management has become a priority among the Chinese population, with an increasing number of people choosing to save more by cutting back on luxury costs.
Many experts believe that this shift in the mentality of Chinese citizens could have a positive impact on the country’s economic health. As the nation seeks to revive its economy and get back on track after the destruction of Covid-19, Chinese citizens may find themselves ahead of the curve when it comes to their personal financial decisions.
Garcia-Herrero recommends that other nations look to the Chinese model in order to effectively manage their own finances after Covid-19. “The Chinese example should be inspirational for any country hit by Covid-19,” she says. “It’s been demonstrated that people are capable of making rational decisions, even in a time of crisis.”
It’s clear that, although Chinese citizens were anticipating a spending surge, the reality is that many are viewing their financial situation very differently. Not only has this helped to create a more frugal lifestyle among the citizens, but it could be beneficial for China as a whole, as it looks to rebuild its economic status in the coming months.