China’s economic recovery normalising after coronavirus, but consumers still suffering from ‘psychological shock’
- China’s economic recovery appears to be consolidating, but consumer confidence is still lagging behind pre-pandemic levels
- Lingering anxiety about financial insecurity, caused by new coronavirus variants, is tarnishing economic recovery, experts say
This is the seventh part in a series of stories looking at China’s economic outlook in the second half of 2021 as it continues its recovery from a coronavirus-hit 2020.
China’s economy is normalising after bouncing back from the worst of the coronavirus pandemic last year, but anxiety about new virus variants and accompanying economic disruption are dragging on overall consumption.
Mainland China recorded 143 new cases on Tuesday, bringing total infections to 93,969, and the death toll to 4,636.
“The pandemic inflicted a shock to the psychology of the average Chinese household,” said Nigel Chiang, an economist at Centennial Asia Advisors. “[There is a] fundamental change in spending behaviour arising from a more anxious citizenry, despite the economic recovery.”
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China’s economy rose 7.9 per cent year on year in the second quarter of 2021
Chinese households already had a relatively high sense of personal financial insecurity before the pandemic, due to factors like inadequate pension arrangements, housing affordability problems and an ageing population, Chiang said.
