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China Consumer Spending Hits Record Slowdown

Bloomberg Markets •
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China's retail sales have recorded their weakest January-February period since before the pandemic, underscoring mounting pressure on Beijing's economic growth strategy. The data signals deepening challenges for a government that has emphasized domestic consumption as a key pillar of its post-pandemic recovery. Consumer spending growth has fallen well below expectations, raising concerns about the effectiveness of recent stimulus measures.

Retail sales in the first two months of the year showed minimal growth compared to the same period last year, marking the worst performance outside of pandemic disruptions. The slowdown comes despite government efforts to boost household spending through various incentives and support measures. Economists point to persistent weakness in consumer confidence as a major factor holding back retail activity.

The weak start to the year highlights the difficulty of shifting China's economy away from its traditional reliance on exports and infrastructure investment. With household consumption still lagging behind other major economies, the government faces an uphill battle in meeting its growth targets. The disappointing retail data suggests that achieving a more balanced economic model may take longer than initially anticipated.