China’s leadership was hoping that it could rely on domestic consumers to take the sting out of any US tariffs, the South China Morning Post editorializes. But as Chinese spending habits start to look more like those of Americans, Beijing might need a Plan B.
“China may be renowned for the high savings levels of households, which are partly attributable to Chinese culture, but they are also due to the thrift of an older generation who endured hardships in the 1960s and 1970s that made them mindful of the need to save for a rainy day.
“China’s new generation has a very different mentality, more akin to American counterparts, in the sense of living on borrowed money,” the paper argues.
“Not only has the level of household debt become a serious concern, but the government has tightened credit. Faced with an uncertain outlook, the middle class has begun cutting back on conspicuous consumption. It is a self-fulfilling lack of confidence which, if not managed carefully, could have a serious knock-on effect.”
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“China may be renowned for the high savings levels of households, which are partly attributable to Chinese culture, but they are also due to the thrift of an older generation who endured hardships in the 1960s and 1970s that made them mindful of the need to save for a rainy day.
“China’s new generation has a very different mentality, more akin to American counterparts, in the sense of living on borrowed money,” the paper argues.
“Not only has the level of household debt become a serious concern, but the government has tightened credit. Faced with an uncertain outlook, the middle class has begun cutting back on conspicuous consumption. It is a self-fulfilling lack of confidence which, if not managed carefully, could have a serious knock-on effect.”
Back to Geopolitics
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