Radio Free Asia (RFA) Chinese Edition recently reported on the latest data from the Chinese National Bureau of Statistics, showing that around 460,000 Chinese restaurants were deregistered or had their licenses revoked in the first quarter of this year, a year-over-year increase in restaurant closures of approximately 230 percent. Among the closed restaurants, 180,000 closed in March alone. People in the industry lamented that business has become increasingly difficult. China’s consumer market has continued to decline in the post-COVID-19 era, and a wave of business closures has spread from the manufacturing and international trade sectors to the restaurants industry.

A consumer said in an interview with RFA that many residents in her city could not find jobs and have lost their sources of income; they are cutting back on food and clothing expenses. She also said that people from all walks of life are experiencing the current recession. Prospects now are not particularly good, and people don’t dare to spend their money. Thus, China’s day-to-day consumption patterns have changed. People don’t see hope, nor can they see a future.

The recession in the restaurant business is the most direct manifestation of the reduction in the income of Chinese residents – they are not eating out. Some domestic experts suggested that restaurant owners follow the lead of the green energy automobile industry – reduce prices and go overseas.

Source: RFA Chinese, April 23, 2024
https://www.rfa.org/mandarin/yataibaodao/jingmao/ql1-04232024012355.html

A recent survey by an education consultancy in China has sparked heated discussions among Chinese netizens. It claims that, in recent years, an increasing number of university graduates are choosing to work in small counties instead of in big cities, and that the job satisfaction of such graduates has risen. Two young Chinese people interviewed by Voice of America disagreed with the survey results, saying that jobs in smaller counties actually offer lower salaries and fewer career development opportunities, contrary to the survey’s findings.

Wei, a 21-year-old tourism management student, is anxious about his future job prospects (like many of his graduating peers). He feels torn between working in a big city, which would mean intense competition and high living costs, or working in a small county, which would offer fewer opportunities for career growth and have lower-skilled job opportunities, unmatched to his degree.

The survey suggested that, in small counties, employment for bachelor’s degree graduates rose from 20% in 2018 to 25% in 2022, with job satisfaction improving by 9%. The survey reported that 70% of graduates employed in county jobs were working in roles relevant to their degrees. Wei stated that there is a huge gap between the survey results and the reality in China – small counties offer few private sector jobs, have lower pay, have policy implementation issues, and offer only unstable temporary work unless one is in the government sector.

While the survey data show that, in small counties, the monthly income of people with bachelor’s degrees has risen from 4,640 yuan (US$ 640) in 2018 to 5,377 yuan (US$ 742) in 2022, Wei believes that the official numbers are “false rhetoric disconnected from the reality of a decade’s wage stagnation,” and that many graduates end up returning home unemployed.

Some experts suggest that youth are leaving big cities due to lack of opportunities amid China’s current economic downturn and industrial restructuring, and that small counties are seen as providing better work-life balance despite lower salaries.

Source: Voice of America, April 21, 2024
https://www.voachinese.com/a/surveys-found-china-s-college-graduates-seek-job-opportunities-in-smaller-cities-20240421/7578947.html

The downturn in China’s real estate market continues. In the first quarter of 2024, sales by the top 100 real estate companies plunged 47.5% year-on-year. Official data show the prices of new homes and second-hand homes (i.e. homes that are not newly constructed) continuing to decline for several consecutive months.

Though the market for non-new homes showed some positive changes, reports indicate that the real estate market’s overall downward trend is unlikely to reverse, with the winter far from over. Major developer Vanke, once considered a “model player” in the industry, saw its 2023 net profit plummet 46.4% and has implemented management pay cuts. Analysts warn that even “quality” developers face default risks while troubled firms like Evergrande remain in limbo, signaling that the market has not yet bottomed out.

Some expect 2024 to be the year that China’s property market rebounds. However, a greater proportion of experts view the downturn as symptomatic of structural issues, with a solution requiring new economic drivers to replace traditional industries like real estate. The “new productive forces” concept promoted by China’s central government places hope in new industrial areas as economic drivers to spur growth. Doubts remain, however, about whether such “new productive forces” can match the enormous impact of the real estate sector on employment and on the broader economy in the short-term.

The current transitional state of China’s real estate market poses major challenges to the economy, including labor mismatch and overcapacity risks. Real estate had been an economic pillar, contributing around 17% of China’s GDP and employing over 15 million. While strategic shifts towards green energy and digital economies are inevitable directions in the long-term, filling the void left by a struggling real estate sector will not be easy.

Source: BBC Chinese, April 15, 2024
https://www.bbc.com/zhongwen/simp/chinese-news-68786662