World News

China’s Wedding Day will begin as a bite of the COVID real estate crisis Business and Economics

[ad_1]

Beijing, China – For 33-year-old Li Bingwen, this year’s Individual Day promises to be a humble affair. Shanghai office staff will not be able to open the package requested at the November 11 purchase ceremony until the end of the quarantine period of 14 days.

While on a business trip, Li had to be isolated in a hotel more than 400 km from his home when authorities detected a few COVID-19 cases in the surrounding province.

“I actually have a green health code and the result of my nucleic acid test is negative,” he told Lik Al Jazeera, expressing his frustration with the ultra-strict pandemic rules of the local government.

Although Lik does not participate in purchases related to many of his countrymen, he intends to take advantage of the price reductions he offers.

“I would buy annual gifts for friends or some football jerseys,” said Lik, who asked not to be mentioned by her real name.

Unmarried Day, the world’s largest shopping event, is celebrated under a cloud of uncertainty this year as recent COVID-19 outbreaks, power shortages and the growing crisis in the real estate market threaten to dampen consumer spending.

Initially thought by Chinese students as an alternative to Valentine’s Day for the unmarried, “Double 11” has become the last celebration of consumer spending in the last 10 years. Alibaba’s internet empire held its first event in 2009 to take advantage of the rise of China’s e-commerce sector, and only a dozen brands took part in the fight for discounts.

China has been facing a rise in COVID cases in recent weeks [FILE: EPA-EFE]

Last year, Alibaba earned 498.2 billion RMB ($ 78 billion) in the 11 days leading up to the event, a higher amount than Bulgaria’s gross domestic product (GDP). In total, nearly four billion packages were delivered to customers.

More than 290,000 companies are expected to take part in this year’s online shopping festival, offering 14 million discounts and special offers.

Although the COVID-19 case in China is largely under control, the pandemic continues to cause a major disruption in people’s lives. The number of COVID cases in China last Wednesday exceeded 1,000 marks, according to the National Health Commission. Authorities reported 39 cases on Wednesday, 54 the previous day and 62 on Monday.

Due to the strict order of Zero COVID, the authorities have also responded to small sets of infections with strict blockages and nationwide travel restrictions, hitting the bottom lines of businesses and consumers.

As China faced the worst outbreak of COVID-19 since the pandemic began, retail sales rose 2.5 percent in August, according to the National Statistics Office, far from market expectations and fell sharply from 8.5 percent the previous month.

Real estate crisis

In September, the state tabloid newspaper Global Times quoted Banker economist Wang Jun Zhongyuan as describing the slowdown in consumption as the “greatest weakness” of China’s economic recovery since the pandemic.

Last month, Chinese media outlet Caixin warned that household consumption spending could suffer a “long” contraction in COVID, citing, among other things, the real estate crisis centered around Evergrande’s huge indebted property.

80 percent of China’s household wealth is invested in property, which is involved in the health of the real estate market in people’s pockets. According to official data, household consumption in China is only 39% of GDP, compared to 55% or more in many developed economies.

After a rapid recovery in 2020, economic growth slowed in the third quarter to 0.2 percent, the weakest for the year. GDP rose 4.9 percent year-on-year. In September, Nomura cut its growth forecast for the Chinese economy from 8.2 percent to 7.7 percent.

The financial services group cut its forecast by 8.9 percent in August, citing “draconian measures” by the Chinese government against COVID-19 as a weighting factor in growth.

Alibaba, which is being investigated by the authorities for reducing the power of large technology companies and because Chinese President Xi Jinping is promoting “common prosperity,” has significantly reduced the promotion of the event compared to previous years.

The annual gala for the e-commerce giant was held online for the COVID-19 event across the country. The company is also committed to focusing more on environmental sustainability and charitable efforts.

Chinese retail sales have slowed in recent months amid COVID outbreaks and real estate market concerns [File: Thomas Peter/Reuters]

In the capital, signs of economic slowdown are not hard to find. Visitors to the bright Sanlitun district of downtown Beijing are greeted at the beginning by network guards and security guards dressed in black uniforms wearing Soviet-style leather caps.

Buyers cannot enter the complex of the outdoor shopping area without presenting a “green health code” on their phone and without controlling their body temperature. With the exception of one of the newly opened Uniqlo stores, most of the shops are unusually empty, with boring staff mostly single people.

Although people are significantly avoiding buying ranges, analysts still expect Singles ’Day to see significant sales figures, although growth may be modest compared to previous years.

Houze Song, a researcher at the Paulson Institute in Chicago, said he expected a similar evolution to last year’s sales.

“In particular, there are 50 COVID cases per day, which drives more online consumer demand,” Songe said.



[ad_2]

Source link

Related Articles

Back to top button