BeijingThese days, every yuan matters to those in China who are experiencing an economic slump.
Huang Peng, a construction worker, traveled more than 500 kilometers in roughly six hours on a high-speed rail to his birthplace in Heilongjiang Province for the most recent Lunar New Year vacation.
Instead, he paid 160 yuan ($22) to sit straight for eighteen hours on a sluggish train this year. That was significantly less expensive for Huang than a bed on the slow train ($40) or even the high-speed train ($92).
The cost of living in Beijing is exorbitant, even if Huang earns more money there than he would at home.
In an interview at the Beijing Railway Station, he stated that saving money is simply very difficult.
As part of the world’s largest annual human migration, hundreds of millions of people come to China for the Lunar New Year, which is the country’s biggest holiday and a traditional indicator of spending.
As the nation got back to work on Wednesday, the Ministry of Culture and Tourism said that 501 million domestic travels were made by Chinese citizens during the eight-day holiday, a 5.9% increase over the previous year. According to the ministry, they spent 677 billion yuan ($93 million) on domestic travel over the holiday, which is 7% more than they did the previous year.
However, Chinese consumers seem to be feeling constrained as the Year of the Snake approaches.
Even though China’s per capita consumption expenditure increased by over 5% last year to over 28,200 yuan ($3,900), consumer confidence is at an all-time low, which has an impact on retail sales in industries like apparel and cosmetics. As China adapts to slower development generally, that might restrict long-term GDP growth.
Since U.S. tariffs and Chinese counter-tariffs have heightened concerns about a full-scale trade war between the two largest economies in the world, increasing consumption is seen as essential to lowering China’s reliance on exports.
Chinese consumers are more interested in finding bargains, and locals are starting to appreciate bargain stores like Walmart’s Sam Club.
Prior to the holiday, a woman with the last name of Ren, who was on Beijing’s Wangfujing shopping district, stated, “This year, I find myself buying for quality and value for money.” For instance, I also purchase snacks and clothing at a discount.
Beijing has been promoting a broader consumer trade-in program that provides subsidies for electronics like cellphones and home appliances like rice cookers and microwaves in an attempt to boost expenditure.
The Finance Ministry stated last month that the government has so far set aside 81 billion yuan ($11 billion) for consumer goods trade-ins to promote demand in 2025, although officials have not disclosed the full cost of the incentives, according to Reuters.
Shopper XuZicong said that the subsidy, along with discounts from the merchant and Apple, let him save 1,500 yuan ($208) on his new iPhone 16. Apple’s sales in China are declining as a result of increased competition from domestic rivals like Xiaomi and Huawei.
At a Beijing electronics store, Xu stated, “I wouldn’t consider buying an iPhone now if there wasn’t a government subsidy.” I may decide to wait or purchase a less expensive phone from another company.
The subsidies also apply to online commerce, where consumers can discover a plethora of discounts on anything from dining to travel to movie tickets.
In a speech last week prior to the Lunar New Year vacation, Chinese leader Xi Jinping acknowledged that the country was facing a difficult and complicated situation, but he also claimed that Beijing had implemented a number of new policies that would help the economy recover and grow.
Chinese government may need to implement more forceful stimulus measures, according to experts.
According to Tianchen Xu, senior economist at the Economist Intelligence Unit in Beijing, the subsidies have been very effective since they were implemented. However, if the government continues to just subsidize durable items, the effectiveness may diminish.
For the upcoming Lunar New Year holiday, Huang hopes to return home in greater comfort.
“Of course, I’ll take the high-speed train and enjoy the luxury if I make more money next year,” he remarked.
Jennifer Jett reported from Hong Kong, while Eunice Yoon reported from Beijing.