China's economic landscape in 2023 witnessed a moderate recovery, marked by a 5.2 percent GDP growth, with consumption playing a pivotal role, contributing 83 percent to this surge. While facing challenges like declining consumer sentiment and property transactions, the nation demonstrated resilience with stable urban unemployment rates and modest inflation. Notably, the savings rate reached 31.7 percent, propelling total savings to record highs, reflecting cautious consumer behavior amidst uncertainties.
The early months of 2024 depict an economy on a positive trajectory, evident in various consumption indicators. Retail sales, particularly in food service, surged, indicating a robust recovery. Moreover, sectors like automotive, hospitality and international travel exhibited notable rebounds, signaling renewed consumer confidence. Despite concerns, such as geopolitical tensions and declining FDI, the data suggests a hopeful outlook for China's consumption landscape, albeit with uncertainties lingering over the remainder of the year.
The original article is written by a member of The Consulting Report, Daniel Zipser, Senior Partner, Asia Consumer & Retail Practice Leader, McKinsey & Company, Inc.
