China’s Factories Are Humming. Nobody Is Buying
All the indicators point to rising stockpiles of goods as production continues, but consumers are not in the mood to shop.
Consumers aren't in a celebratory mood.
Source; AFP/Getty Images
Chinese policymakers have spent the last year leaning heavily on industrial production to plug the holes in the economy left by sagging consumer demand and a meltdown in the real estate market. This short-term solution won’t work for much longer, especially as an escalating trade war with the US continues to choke off foreign markets.
Beijing is trying all manner of things to juice demand. A newspaper backed by the People’s Bank of China on Tuesday called for a shift in macroeconomic policy toward boosting demand and away from increasing credit supply. The problem, the Financial News wrote, is that cash is piling up in fixed deposits amid weak consumer confidence.