China consumers squeezed in 2018 as income gains slow
BEIJING: Growth in disposable income slowed in China last year while living costs rose, highlighting the increasing strains Chinese households are facing as the economy cools.
Beijing is counting on the nation’s vast consumer base to cushion the broader slowdown, but as the outlook grows more clouded Chinese are tightening their belts, buying fewer cars, electronics and home appliances.
Disposable income per capita rose 6.5 per cent last year to 28,228 yuan (US$4,224), slowing significantly from the 7.3 per cent pace for 2017, according to data published by the National Bureau of Statistics on Thursday.
Urban households saw their income growth ease to 5.6 per cent from 6.5 per cent a year earlier.
At the same time, consumption per capita rose 6.2 per cent to 19,853 yuan, with the jump largely coming from higher healthcare and living costs while the share of spending on food and clothes decreased.
That compared with a 5.4 per cent increase in 2017.
Healthcare costs accounted for 8.5 per cent of total expenditure last year, up from 7.9 per cent for 2017, while living costs took up 23.4 per cent.
Despite slower income growth, the statistics bureau said the figure still outstrips economic growth per capita, and China is on track to achieve its twin goals of doubling gross domestic product (GDP) by 2020 from 2010 and becoming a moderately prosperous society.
GDP per capita grew 6.1 per cent last year to 64,644 yuan (US$9,675.51).
By that measure, China is on the same level as many emerging markets, even though it is the world’s second-largest economy by GDP after the United States.
Given its huge population size of 1.4 billion people, it is a key market for many foreign brands.