Over the past month, in response to disappointing economic data, various Chinese government agencies have announced measures intended to stimulate household spending and bolster consumer confidence. China’s economy continues to be plagued by deflation, high youth unemployment, a troubled real estate market, and weak activity in the manufacturing and services sectors.
While there have been calls for broader and more aggressive stimulus measures, thus far policymakers seem to be relying on targeted incentives such as tax cuts and rebates to get households to spend more on travel, entertainment, cars, appliances, and furniture. According to Shao Yu, chief economist at Shanghai-listed Orient Securities, “What the government is offering is subtraction – offering lower prices – but what’s more needed is addition – higher income.”
For many Chinese wage-earners, the recent spate of government pronouncements on stimulating household spending are not sufficiently reassuring. At a time when many people are struggling with stagnant incomes and economic uncertainty, the various 20-point, 17-point, and 11-point statements issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce tend to ring a bit hollow.
A recent question posted on the Quora-like Chinese Q&A site Zhihu asked users, “What do you think of these repeated government calls to boost consumer spending?” The answers reveal a profound disconnect between the economic woes of ordinary citizens and the government’s attempts to “talk its way out” of an economic downturn by pressuring consumers to open their wallets.
CDT editors have compiled some of the responses by Zhihu users (usernames are in Chinese, followed by a colon), a selection of which are translated below:
卓什么君：It’s like a starving homeless man can’t shit because he has nothing to eat, but the doctor just prescribes him laxatives.
Leadership: You must consume.
Individual: I don’t have any money.
Leadership: We’re going to stimulate consumption to increase consumer confidence.
Individual: I still don’t have any money.
Leadership: How about we let you make some money by investing in stocks?
Individual: Investing in stocks is how I lost my money.
Hong Kong’s stimulus plan: issue cash payments
Taiwan’s stimulus plan: issue cash payments
Singapore’s stimulus plan: issue cash payments
Our stimulus plan: issue statements
[…] Leader: Your refusal to consume is just plain malicious!
Ordinary folks: No, no, it’s just that the economy’s been sluggish for the past two years, and for much of those two years, you wouldn’t let us leave our houses. We really don’t have any money. If we did, we’d definitely spend it. We want a better life, too, you know.
Leader: All right, all right, let me think … What can I do to help you increase your income?
Ordinary folks: (waiting eagerly)
Leader: I know! Why don’t you invest … in the stock market?
Ordinary folks: (!!)
Is it possible that this is some sort of disclaimer? It’s like, let’s make a statement now, so when the economy falls into recession, we can point back to what we said, claim the moral high ground, and complain, “Well, it’s your own fault for not consuming enough.”
Given the choice between handing out cash payments or spending vouchers, they chose to issue statements.
The “little pinks” won’t touch this topic with a ten-foot pole.
This goes to show that the policy wonks and think-tank experts are out of ideas.
They issue all these policies and guidelines, but they still can’t save the economy. In chess, it’s no big deal to make a bad move every once in a while. But if you’re constantly making bad moves, doesn’t that signal a lack of skill on the part of the player?
Instead of holding think tanks and policy wonks accountable, they blame the common people for not cooperating and not spending enough. Doesn’t it seem like they have the wrong end of the stick?
Who, after all, has monopolized the benefits of the last 30 years of “reform and opening”?
Their fantasy of the common people: “They’ve got loads of money, they just don’t want to spend it. If we keep banging on about boosting consumption, we’ll somehow manage to squeeze some cash out of those people’s pockets.”
The common people, in reality: “Our pockets are empty, we’re broke, not interested in what you have to say, see ya later, bye.”
What did we ever do to make the government think we’re all rolling in cash but are just reluctant to spend it? [Chinese]