However, improving household incomes and labor market conditions remains critical for sustaining consumer confidence.
China’s consumer confidence index rose slightly from 86.2 in November to 86.4 in December, hovering just above the November 2022 record low of 85.5. Recent government pledges could support a shift in sentiment and spending appetite. On February 10, Beijing announced plans to:
- Increase residents’ income and promote reasonable wage growth.
- Better fulfill housing and consumer spending needs.
- Place greater emphasis on boosting consumption.
Beyond these measures, unemployment remains another challenge. The youth unemployment rate has fallen from 18.8% in August 2024 to 16.1% in November 2024. However, this remains excessively high compared to a national unemployment rate of 5%.
Beijing could address this issue by incentivizing firms to hire young people or introducing labor reforms…
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