Covid controls and financial worries take sheen off China’s golden week for millions
- Strict lockdowns in some parts of the country and growing economic uncertainty are likely to dampen tourism and spending during the National Day holiday
- Recent crackdowns on the property market and private tutoring could prompt many consumers to tighten their belts
“I avoid long-distance travel,” Zhang said. “By doing so, I can reduce the possibility of getting infected with coronavirus, save money and save time. Travel less, spend less. I’ll look for odd jobs during the holiday to offset the fall in my income.”
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Mobility curbs under China’s stringent coronavirus control measures and gloomy employment prospects are also likely to prompt more consumers to tighten the purse strings.
Retail sales growth, a key measure of consumer spending in the world’s most populous nation, weakened to 1.5 per cent last month from 3.6 per cent in July as strict quarantine and lockdown measures were introduced to tackle Delta variant clusters in August, restricting mobility and battering the services industry.
During the three-day holiday, mainlanders made a total of 88 million trips domestically, about 87 per cent of the figure for the same holiday in 2019. Tourism revenue totalled 37 billion yuan, nearly 79 per cent of the 2019 figure, official data showed.
Larry Hu, an economist with Macquarie Capital, said: “The zero-tolerance policy has been highly effective in putting Covid under control, but the short-term cost is also extremely high.
“How long the government would stick to the strategy depends on the vaccination ratio and vaccine efficacy. At this stage, it seems that policymakers will stick to the zero-tolerance strategy at least before the [Winter] Olympics next February.”
Zhang said he was not in the mood to spend money. “Once there’s an outbreak, a large area enters into a crisis status,” he said, “I don’t feel calm, especially since it became hard to find odd jobs over the summer.”
Prospective homebuyers now face greater scrutiny to curb speculative investments, mortgage rates have risen in several major cities and speculation on housing near schools has been curbed.
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As a result, in Shenzhen, one of China’s hottest residential real estate markets, resale home transaction volume plunged by 84.5 per cent in July compared with a year earlier, according to data from the China Real Estate Information Corporation.
Between July and August, resale home transaction volume declined by 24.3 per cent in Shanghai and 10.7 per cent in Beijing, data from Centaline Property showed.
The cooling property market means Zhang’s income has fallen because there is less demand for his services.
“I usually buy a box of mooncakes for my family for the Mid-Autumn Festival,” Zhang said, “This time I only bought one mooncake to save money for difficult times ahead.”
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Migrant worker salaries have struggled to recover. Last year, mainland China’s 285 million migrant workers had an average monthly income of 4,072 yuan (US$630), a 2.5 per cent increase on the 2019 figure.
By contrast, incomes rose by 6.5 per cent the previous year, before the pandemic bit.
Workers in other sectors are also feeling the pinch.
In July, tutoring and education firms were ordered to convert to non-profit status and banned from offering classes in Chinese, maths and English over weekends and school holidays. They were also prohibited from using foreign curriculums or offering classes run by foreigners outside China.
The tutoring industry, which employed more than 10 million people nationwide, has seen some companies struggling to pay their staff on time while others have been forced to lay off staff or even close.
Danny Lin, a teacher who works for a private company in Beijing, said he has not yet noticed the impact of new regulations, but expects his income to suffer in future.
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The new rules took effect from the end of August, meaning that most of this year’s summer classes were unaffected. “Summer is the peak season when I work 12 hours a day,” Lin said.“ With the money earned from working overtime, I bought three tickets for the Universal Studios theme park and took my wife and son there on Tuesday.”
But Lin said that when he went to the park, which opened to the public on Monday, he had to watch his spending.
When his five-year-old son begged for a Harry Potter robe, which is priced at over 800 yuan, the father persuaded him to buy a wand instead, at 346 yuan.
“We have to be restrained in our spending. The good days are over. From now on, my job will not offer me a salary as good and stable as before,” he said. “I could be out of a job at any time.”
Li Hui, a mother from Shanghai spent 10,000 yuan on online lessons for her 11-year-old but the company collapsed and she is unlikely to receive a refund.
She said that while the family was planning a National Day getaway in the mountains of Zhejiang province they were planning to limit their spending.
“Too many things have happened this year, and I’ll spend the holiday resting and thinking. Hopefully I’ll figure out what to do next,” she said, “We’ll have a moderate holiday. A spending spree is definitely out of the question.”