### Summary
Beijing is focusing on domestic consumption to offset low external demand.
### Facts
- 🏭 Beijing aims to boost domestic consumption to counterbalance weak foreign demand.
- 🌴 Shandong becomes the latest Chinese province to promote annual leave, despite being legally guaranteed, only 60% of Chinese workers take it.
- 📜 Beijing has recently released measures to encourage holiday and leisure spending.
China should continue to prioritize the principle of "houses are for living in, not for speculation" to prevent potential negative impacts on economic and social development, according to an editorial in the state-run Economic Daily, as the country faces a downturn in the property sector and potentially unwinding some curbs.
China faces challenges in rebalancing its economy towards increased consumer spending due to the economic growth model that relies heavily on investment in property, infrastructure, and industry, as well as the reluctance of households to spend and the limited social safety net; implementing demand-side measures would require difficult decisions and potential short-term pain for businesses and the government sector.
Chinese homebuyers remain skeptical about entering the property market despite the Beijing government's measures to revive the economy, including lower mortgage rates, due to concerns about the slowing economy and the deepening crisis in the debt-ridden property sector.
The economic uncertainty in China has led middle-class consumers to shop at wholesale markets for cheaper goods, impacting the luxury industry and highlighting the weakness in household demand in the country's struggling economy.
New home sales in Beijing have increased by 16.9% in the week of September 4-10, indicating that government efforts to revive the property sector are having an impact in the Chinese capital. However, the rebound in sales is not reflected across the rest of China, with sales falling 20% on average nationwide.
The global smartphone market has experienced both growth and decline, with the number of active brands decreasing by two-thirds due to various factors such as the rise of Chinese brands, lack of R&D spending by local brands, and economic challenges. The decline has primarily affected local brands, while the competition from Tier-1 Chinese brands has intensified, offering better value for money. The Covid-19 pandemic has further exacerbated the challenges faced by small brands.
China is seeking to increase productivity and efficiency in its industrial northeast region, facing economic challenges such as an aging population, declining birthrate, and a real estate crisis, but some economists argue that the government's focus on industrial investments is outdated and lacks measures to stimulate consumer confidence and spending.
Europe's luxury brands are facing challenges with a slowdown in the Chinese economy and uncertainty over interest rates, leading to a decline in their stock prices and rising concerns over the outlook for luxury consumption across the US, Europe, and China.
China is making efforts to transition to a consumption-centered economy to boost domestic consumption and increase income levels, according to investment guru Fang Fenglei, who believes it could take a decade for the process to fully unfold. The government aims to increase affordable housing for citizens and address issues such as local government debts and the discrepancy in interest rates between the US and China.
