What you need to know
The outbreak of COVID-19 has brought unprecedented disruption to China’s social and economic activities, resulting in a 6.8% contraction in its GDP in the first quarter of 2020 according to NBS data.
After two months of lockdown and social distancing measures since the end of January, China has started to resume economic activities. Key economic indicators have all shown signs of recovery in March. This immediate recovery is largely driven by the resumption of business activities. What’s more important is the recovery in months to come, which will demonstrate how much consumer confidence has been restored. Mintel research tracking Chinese consumers’ reaction to the outbreak shows that by April 2020, though there are signs that consumer confidence is improving, full recovery will be slow and cautious.
At this stage, it is too early to conclude whether China will enter a recession or not. After all, China still has a huge domestic market of 1.4 billion people which is already driving 60% of its GDP growth in 2019. It is also among the first few countries to have gotten the outbreak under control. However consumer confidence has been shaken and the pandemic has also led to weakened global demand as well as uncertainties in China’s trade relationships with the rest of the world. This means 2020 will be a year about fighting for survival for many businesses.
Key issues covered in this Report
How is COVID-19 impacting the economy?
How is COVID-19 impacting consumer spending?
Which sectors are holding up and which are struggling?
Report scope
This is a quarterly Report that examines macro-economic circumstances, consumer financial status, and spending confidence in China. Given this Report is written during the outbreak, the market and consumer dynamics will be discussed against the background of economic slowdown and the COVID-19 outbreak.
