According to the Chinese horoscope, the Year of the Dragon is a symbol of "happiness, wisdom and success". It is questionable whether the Chinese economy will be successful this year as well. Experts predict economic decline, he writes Deutsche says.
The first sign was a decline in the consumption of pork, which is used in many traditional dishes. The indicator is interesting because every second kilogram of pork on the planet is eaten in China.
The Bloomberg news agency quotes a butcher from Beijing who complains that his turnover has dropped by a third compared to normal holidays, even though a kilogram of pork is on average 20 percent cheaper compared to the same period last year.
In addition to the decline in consumption, one should also take into account the measures taken by China's stock exchange supervisory authority to mitigate the decline in stocks on the Chinese stock market. Traders of stocks and securities see this as a bad omen for this year.
Usually, what happens on state-controlled stock exchanges is considered a sign of economic trends. The Shanghai index lost 13 percent of its value in the last twelve months.
"If the year doesn't go well and consumers don't spend money, China will remain in deflation for a long time," said Wang Guo-chen, an economist at the Chung Hua Institute of Economic Research in Taiwan.
Deflation occurs when the supply on the market is greater than the demand, and consumers no longer have enough money to buy goods. Prices then fall. Economists believe that deflation is even worse than the opposite economic phenomenon - inflation.
Budget tourists
Like Christmas and New Year's time in Christian countries, Lunar New Year's time in China is the period of most spending. Gifts and new household appliances are bought. Hospitality counts with a good celebratory mood.
"It is the most important celebration for the Chinese," says Kong, 31, from Shanghai. "It is necessary to invest a lot of money in a festive meal and many gifts," adds the young mother.
This year, Kong decided not to celebrate at home, but in the south of the country. It is increasingly popular in China. It is celebrated on vacation.
"Four weeks ago I wanted to book a family room. That was almost no longer possible," she says.
Kong spends only on what is necessary. There are many Chinese people who like to travel on a tight budget.
In December, the Global Times, a newspaper close to the government, reported that trips abroad, to Singapore, Malaysia or Thailand, were fifteen times more frequent than last year. That is impressive, but it should be remembered that a year ago travel abroad was barely possible due to anti-pandemic measures.
A record nine billion journeys are now expected to be recorded in the six weeks around the spring break. This includes short trips near the place of residence.
A woman on winter vacation near Beijing says that accommodation prices are lower than last year. Howe, a public school educator, says she has not personally noticed the economic downturn.
"But I heard among friends that many are affected by unemployment and wage cuts." "They buy less clothes and gifts for the holiday," she says.
Wrong data?
In January, at the World Economic Forum in Davos, Chinese Prime Minister Li Qiang presented the first gross domestic product estimate for 2023.
According to him, the Chinese economy reached the government's goals with a growth of 5,2 percent. The Chinese Bureau of Statistics stated that the total turnover of consumer goods last year increased by 7,2 percent to 6,3 billion euros. In gastronomy, turnover increased by 20,4 percent, and in trade by 5,8 percent.
Economic expert Wang says the data raises questions. "A deviation from reality is possible."
The hospitality industry is growing, but the price of pork is falling under the pressure of deflation. That is not logical. Last year, inflation in China was at its lowest level in ten years.
"That got me thinking. How much did the Chinese spend on food in 2023? Or there's a problem with the restaurant's revenue, the numbers haven't grown that much. Or food prices are not so low."
Wang is not the only one to see the contradictions in China's statistics. "Many economists view Beijing's official economic data as a guide only," said an editorial in the Financial Times. "If the start of the year goes wrong, it will have a negative impact on the whole year," says Wang.
