New Delhi, Nov 14 (SocialNews.XYZ) China is facing persistent deflationary pressure and an economy in which households do not spend enough, a new report has said, adding that without cultural changes and broader shifts in social security systems and income structures, it is not easy for Beijing to expand consumption.
According to a report in The Diplomat, for years, property ownership was the primary investment portfolio for the first-generation Chinese middle class, “but now the property meltdown has created severe negative effects on the economy”.
Despite central and provincial-level measures, not much has changed in the economic numbers.
“In 2025, real estate development investment fell by 17.2 per cent, and new home sales fell by 8.7 per cent. Consumer confidence, meanwhile, is very fragile, reflecting deep-seated economic problems in China,” the report reveals.
In a latest published survey in China, 62.3 per cent of respondents said they preferred to save more, while only 19.2 per cent preferred to spend more and 18.5 per cent to invest more.
The report further stated that household consumption was 46.8 per cent of GDP in 2000 and fell to a low of 34.6 per cent in 2010, when investment peaked at 46.1 percent of GDP.
“In 2024, the average share of consumption to GDP was 40 per cent, and investment amounted to 40.5 per cent of GDP. Therefore, consumption’s role as a driver of growth has weakened. In 2025, final consumption contributed 2.6 percentage points to China’s 5 per cent growth,” the report argued.
Going forward, China’s aging society with a shrinking population will need far more care and health services than it does refrigerators.
“If the CCP cannot increase demand for goods using trade-in coupons, it hopes to increase demand for services that households need anyway. But achieving that requires the very investment in people that the system has so far been reluctant to make,” the report highlighted.
Source: IANS
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