On Tuesday, 16 January, China’s biggest jewellery and accessories retailer admitted that the country’s economic confidence has not yet returned to its former pre-pandemic glory.
China’s economy slow off the mark in 2024
Chow Tai’s managing director, Kent Wong, noted that consumers and investors alike are turning away from precious jewels and instead opting for gold consumption, a move that suggests little confidence in national and global financial stability.
Although gold purchases are increasing as diamond and gemstone sales decrease, Wong’s statement suggested that consumer confidence would return in approximately two years; this can only happen if the country avoids the looming debt deflation that has clogged spirits in the past three years.
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According to Reuter’s analysts, China’s government will release GDP data tomorrow, with hopes that a growth of 5.2% is present in the findings. Predictions for this year’s GDP sit below the national 5% target at a slower growth of 4.6%.
Morgan Stanley’s chief China economist Robin Xing expressed that the firm believes China’s economy is currently amidst its longest period of deflationary pressure since the 1997-98 Asian financial crisis – policymakers disagree.
Robin Xing Source: CF40
Xing stated:
I think it’s a critical year for the Chinese economy in the sense that deflation could be entering a vicious cycle. To break that cycle, we need to have some very meaningful policy efforts.
As Xing suggests, the country may see new policy implemented after the National People’s Congress meeting, scheduled for early March. After the lowest GDP target in decades, the world’s second-largest economy is in need of a swift change.
