Chinese per capita spending shrinks, exposing economic difficulties

 Direct translation

Chinese per capita spending shrinks during Dragon Boat Festival, exposing economic difficulties

Reporters : Li Yun and Qiu Yue / https://www.ntdtv.com/gb/2025/06/04/a103993055.html / Image of a closed trading shop in China : Gan Yung Chyan

Data released by the Chinese Communist Party show that during the three-day Dragon Boat Festival this year, the number of Chinese people traveling increased, but per capita consumption decreased compared with last year. Experts analyzed that this exposed a large structural problem in China's economy.

The Chinese Communist Party's Culture and Tourism Bureau released statistics on Tuesday (3 June 2025). During the three-day Dragon Boat Festival holiday, 119 million people traveled domestically across the country, a year-on-year increase of 5.7%.

However, China's per capita consumption fell year-on-year. According to Epoch Times calculations, per capita consumption was about 359 yuan, a decrease of about 2.1% compared with 366 yuan during the Dragon Boat Festival last year, and also lower than the consumption level of about 410 yuan before the epidemic in 2019.

Yu Weixiong, an economist at the Anderson Forecast Center at the University of California, said, "This is a manifestation of the great structural problems of the Chinese economy. The per capita consumption of Chinese people accounts for only about 30 to 40 percent of the entire GDP, while the average country is 60 to 70 percent. This means that China has a serious imbalance problem."

After the epidemic, China's economy deteriorated, people's wealth shrank, and life pressure increased. Consumers have emerged to save money by not buying, buying less, and buying slowly.

Yu Weixiong: "China's economy is now in a serious late stage of asset bubble. Ordinary people will save money if they have financial planning. Therefore, the government must propose a lot of stimulating policies to stimulate families and give them more security and income, so that they can slowly solve the difficulties of the Chinese economy."

China's Caixin Manufacturing PMI in May, released on 3 June 2025, fell to 48.3, the lowest since September 2022.

American economist David Huang: "The PMI boom-bust line falling below 50% is a signal of a technical decline in the manufacturing boom and a structural stall. From a technical perspective, both exports and domestic demand have weakened in the short term. On the external demand side, due to high interest rates, weak orders from Europe and the United States, and tariffs, export companies are facing geopolitical and tariff pressures. On the domestic demand side, the domestic real estate market has not stabilized, the private economy lacks investment confidence, taxes are too high, and social security is too low, resulting in contraction of upstream and downstream orders. From a structural perspective, the wild growth of the securities and financial industries in the past has hollowed out a large amount of the real economy, making it difficult for the entire PMI to stabilize."

The shrinking PMI value comes at a time when the U.S.-China trade friction is intensifying. As exports continue to decline, the employment situation has become more severe.