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消費降級(xiāofèi jiàngjí): Consumption downgrading

China Daily | Updated: 2018-09-07 07:46
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Shoppers at an imported goods store at the bonded port area of Qingdao, Shandong province. [Photo by Yu Fangping / For China Daily]

Since the beginning of the year, the growth rate of China's retail sales of consumer goods has slowed, which has been used as evidence there is a growing trend for consumption downgrading. Statistics show single-digit growth for the total retail sales of consumer goods in the first half this year, while in the past few years its growth has been double digit. Some people also regard the large-scale profit growth of a major pickle brand and the success of an online discount platform as other signs of consumption downgrading.

But these are limited signs as they do not include service consumption, which has increased remarkably in recent years.

And other statistics do not support the claim of consumption downgrading. In 2017, China's Engel Coefficient, which shows the proportion of food expenditure in total household spending, decreased 34.6 percentage points from the level in 1978 when it was 63.9 percent. It shows Chinese residents' consumption structure is upgrading, as they are spending more money on goods and services other than food.

It gives a false picture of people's overall consumption behavior as not everything is taken into account.

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