Retail in Asia

In Markets

China consumers tighten belts, a red flag for the global economy

Domestic consumption contributed 60 percent of China’s economic growth in the first half of 2015, up from 51.2 percent in the whole of 2014, suggesting Beijing’s desired rebalancing is on track. But forward looking indicators and companies’ experiences in China are more worrying.

A China consumer confidence index produced by ANZ Bank and polling company Roy Morgan fell to a record low in August. Car sales in China could drop this year for the first time in two decades, while smartphone sales recorded their first fall in China during the second quarter, consumer research firm Gartner said.

If that translates into a slowdown in overall consumer spending, the impact will be felt beyond China.