half-year data view | consumption in first-tier cities has been downgraded, and new hot spots are still in second-tier cities and rural areas
2024-08-29
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promoting consumption is of great significance to improving the current economic environment and is a goal that economic policies have always adhered to in the post-epidemic period. recently, the political bureau of the cpc central committee meeting on july 30 proposed "expanding domestic demand with a focus on boosting consumption". in june, the national development and reform commission issued the "measures on creating new consumption scenarios and cultivating new growth points for consumption", which formulated a series of measures to promote the upgrading of consumption scenarios and digital empowerment in six areas, including catering, culture and tourism.
different regions show different consumption trends. a study found that although the continuous consumption upgrade in economically developed regions faces bottlenecks, the consumption growth in the central and western regions still has "stamina". taking the yangtze river delta as an example, can we also observe the situation of "one wave of consumption just subsides, another wave rises"? are there new consumption hotspots?
recently, various cities have disclosed their economic reports for the first half of 2024. researchers at the paper collected consumption and income data from 41 cities in the yangtze river delta and found that cities such as shaoxing, quzhou, and jiaxing, as well as rural areas, performed outstandingly in terms of consumption and income growth.
consumption growth in major cities in the yangtze river delta is under pressure, and consumption in shanghai and hangzhou is spilling over to surrounding cities
the retail sales of consumer goods is a seller data (hereinafter referred to as "social retail sales"), which counts the total sales volume of commodities sold by urban and rural residents for daily consumption and by social groups for public consumption in the city.
according to table 1, we found that the retail sales growth rates of shanghai and the three provincial capitals of hangzhou, nanjing and hefei were relatively low. in particular, shanghai's year-on-year decline was 2.3%, with wholesale and retail sales down 2.1% and accommodation and catering down 3.6%. in addition, the retail sales growth rates of hangzhou, nanjing and hefei did not exceed the national average (3.7%).
july entered the "summer season", but consumption data further declined. from january to july, shanghai achieved a total retail sales of consumer goods of 1,051.464 billion yuan, down 2.8% from the same period last year (july's monthly retail sales were 6.1% lower than the same month last year). among them, wholesale and retail industries fell by 2.6%, and accommodation and catering industries fell by 4.2%. some reports pointed out that the consumption downgrade is mainly reflected in the sales of high-end shopping malls in first-tier cities.
data source: statistics bureau of each citynote: no data for lianyungang
let's look at the consumption data. the per capita consumption expenditure of permanent residents in the city is the total expenditure of the surveyed households to meet the daily consumption needs of the family, including expenditure on consumer goods and expenditure on service consumption. this data is less disclosed. among the four core cities mentioned above, only hangzhou and shanghai have announced the per capita consumption expenditure of residents.
the growth of per capita consumer expenditure in hangzhou and shanghai is better than the seller's consumption data - social consumer goods retail sales. from january to june 2024, the per capita consumer expenditure of shanghai residents increased by 0.7% over the same period last year, higher than the social retail growth rate (-2.3%); the per capita consumer expenditure of hangzhou residents increased by 6.1% over the same period last year, also higher than the city's social retail growth rate (0.0%).
this may mean that residents in hangzhou and shanghai have increased their non-local consumption, that is, there may be a phenomenon of consumption spillover to surrounding cities. this partly explains why the cities with higher social retail growth in table 1 are mostly in the surrounding areas of the four core cities. in particular, shaoxing (10.2%), quzhou (9.0%) and jiaxing (8.4%) in zhejiang province are 6.5, 5.3 and 4.7 percentage points higher than the national average (3.7%), respectively.
finally, there is another city that deserves special attention - suzhou. although suzhou is not a provincial capital, it is also an important growth pole in the yangtze river delta. unlike shanghai and the three provincial capitals, suzhou not only ranks high in social retail growth (7.4%), but also has a relatively impressive per capita consumer expenditure growth rate (6.9%).
according to official explanations, this is because suzhou's automobile and smart consumer markets are hot, which has effectively boosted local consumption. in the first half of the year, suzhou's above-scale units achieved a retail sales of automobile products of 59.77 billion yuan, a year-on-year increase of 18.0%. stimulated by consumption promotion policies such as old-for-new, the retail sales of smart home appliances and audio-visual equipment products of above-scale units increased by 15.1%. other reports pointed out that the recovery of suzhou's consumption also benefited from the recovery of education and entertainment consumption after the decline of rigid consumption such as housing and food storage.
the sluggish consumption in big cities is caused by the slowdown in income growth
however, even if it is better than the seller's data, the growth of per capita consumer expenditure in hangzhou and shanghai is not at the forefront in the yangtze river delta, which may be related to the weak growth of per capita disposable income in shanghai and hangzhou. for example, ningbo (7.0%), quzhou (around 7%) and jinhua (7.2%) have also announced per capita consumption data, all higher than hangzhou and shanghai. [note: quzhou did not announce the consumer consumption index, but announced the growth of urban residents' consumer expenditure (6.9) and rural residents' consumer expenditure (8.0), both higher than hangzhou (6.1), so there is reason to believe that the growth of quzhou's citywide consumer expenditure is higher than hangzhou. ]
in the first half of 2024, the per capita disposable income of urban residents in shanghai increased by 4.2%, while that of hangzhou increased by 3.3%, both lower than the national average of 4.6%. it is worth mentioning that in the first half of 2024, the per capita disposable income of urban residents in shanghai was surpassed by hangzhou, shaoxing and ningbo for the first time (see table 3). in other words, one explanation is that the income growth of shanghai residents is under pressure, which leads shanghai residents to consume in surrounding areas with lower prices.
compared with 2023, the weak growth of consumption-related data in the yangtze river delta in the first half of this year is a new situation. figures 1-3 show that the retail sales, residents' income and consumption in the five growth pole cities in the yangtze river delta in the first half of 2024 were lower than last year as a whole and the same period last year, especially shanghai, which saw the largest decline.
looking at the trends over the years, the growth rate of retail sales in the central cities of the yangtze river delta has fluctuated in recent years (see figure 1). sales growth was under pressure in 2020, 2022 and 2024, but rebounded in 2021 and 2023. the trends of residents' income (figure 2) and consumer expenditure data (figure 3) are consistent with the trends of retail sales.
researchers at the pengpai research institute believe that the data change trends in 2020 and 2022 are related to the epidemic in large cities during that period, while the "contraction" in 2024 is a manifestation of "insufficient effective demand and weak social expectations" caused by the superposition of china's economic cyclicality and structural factors.
why is consumption performance in first-tier cities generally worse than that in second- and third-tier cities?
looking at the whole country from the yangtze river delta, further analysis shows that developed cities have weak consumption growth, while late-developing cities still have "stamina", which is a common phenomenon across the country. from january to june 2024, the performance of the four first-tier cities in the same period was significantly lower than the national average (3.7%), among which shenzhen rose by 1%, guangzhou remained unchanged, and beijing and shanghai fell by 0.3% and 2.3% respectively. if we only look at the performance in june, shanghai, beijing, guangzhou and shenzhen fell by 9.4%, 6.3%, 9.3% and 2.2% respectively.
according to lianhe zaobao, among the 31 second-tier cities classified by the national bureau of statistics of china, the total retail sales of 23 cities increased year-on-year in the first half of this year (5 cities had no data). among the 35 third-tier cities officially classified, consumption increased in 26 cities (6 cities had no data), and 22 of them had an increase that reached or exceeded the national average of 3.7%.
other reports confirm that the sustainability of consumption growth in the central and western regions is stronger than that in the eastern region: from january to june 2024, guizhou's social retail sales increased by 0.4 percentage points year-on-year compared with 2019, reaching a high growth rate of 5.5%. the social retail sales in hunan, henan, hubei, guizhou, and sichuan increased by 5.7%, 5.6%, 5.5%, 5.5%, and 4.9% year-on-year, respectively, all exceeding the national average growth rate.
researchers at the paper research institute believe that there may be three reasons why the main consumer force has "moved downward" to less-developed cities.
first, first-tier cities have more high-tech jobs in the internet, technology and finance industries, which are greatly affected by this round of salary cuts and layoffs, and the consumption downgrade is more obvious. the financing and listing environment of the technology industry has changed significantly this year. at the same time, the financial industry is in a stage of structural adjustment, and the income of related practitioners may be affected, affecting consumption expectations.
second, with the recent emphasis on high-tech manufacturing, second- and third-tier cities with weak financial attributes and dominated by manufacturing have instead ushered in opportunities. especially under the influence of current policies such as subsidies for new energy vehicle consumption and "promoting a new round of large-scale equipment renewal and consumer goods trade-in", the top ten cities with the fastest retail sales growth in table 1 all have a strong or rapidly developing equipment manufacturing base.
third, the consumption downgrade in first-tier cities may have a certain driving effect on the consumption data of surrounding cities. the growth of per capita consumption expenditure in large cities is often higher than the retail data, which shows that high-income large cities are still consuming, but not locally. it is just that due to the pessimistic income growth, residents of large cities may choose to go to surrounding cities to choose consumption with higher "cost performance". and it is in this context that new rural cultural tourism may usher in a new outlet.
online economy, innovative cultural tourism: new consumption hotspots still look to rural areas
looking at the urban-rural decomposition data, researchers at the paper research institute found that consumption hotspots are not only in late-developing cities, but also in rural areas. table 2 shows all cities in the yangtze river delta that announced per capita consumption expenditure of urban and rural residents in the first half of 2024. it can be seen that the growth rate of per capita consumption in rural areas is generally faster than that in cities.
data source: municipal statistics bureau
behind the rapid growth of consumption is the rapid growth of income. table 3 shows the per capita disposable income of urban and rural residents in 41 cities in the yangtze river delta in the first half of 2024. the per capita disposable income growth rate of all rural residents is higher than that of urban residents. in particular, the urban-rural income gap in jiaxing city has reached 1.34, the lowest in the yangtze river delta.
at the same time, we also found that according to the data currently published, the savings rate in rural areas is even lower. the average savings rate of urban residents in the yangtze river delta region is 42.1%, while the average savings rate of rural residents is 36.1%. at the same time, rural consumption growth is faster than disposable income growth.
data source: municipal statistics bureau
how to explain the new consumption trends in rural areas? it is a relatively long-term phenomenon that rural consumption has grown faster than urban consumption. existing studies have shown that the online economy represented by e-commerce, commercial infrastructure centered on logistics, fiscal education spending and inclusive financial development have all contributed to promoting rural consumption. in particular, e-commerce and logistics are important tools for current rural economic policies.
however, this article focuses on a possible new factor: the increasingly popular rural theme tourism in recent years may have effectively taken over the consumption demand of surrounding cities. it is reported that "a large number of tourists from cities such as shanghai and hangzhou have supported the booming rural tourism and homestay economy in places such as huzhou, zhejiang."
since the beginning of this year, many villages in the yangtze river delta have tapped into their local natural and cultural advantages and developed creative tourism projects such as "road trips", "camping team building", "experience economy" and "short-distance travel", as well as the construction of cultural and tourism ips such as homestays, research, ecology and health care. during the may day holiday, rural tourism boosted the consumption development of the entire yangtze river delta. on the eve of the summer vacation, the ministry of culture and tourism selected and launched 82 high-quality rural tourism routes as a warm-up.
zhejiang province pays particular attention to rural cultural tourism. last year, the zhejiang provincial department of culture and tourism issued the "notice on implementing the "five creations" action for rural tourism to support the construction of the "ten million project" in the new era", proposing that the completion rate of scenic villages in the province will reach more than 65% by 2026. guided by this policy, zhejiang province has focused on island tourism this year, with the goal of receiving a total of 100 million tourists and 100,000 inbound tourists annually in the top ten island parks by 2026.
according to the economic data of the yangtze river delta in the first half of 2024, researchers from the paper research institute found that the pace of consumption upgrading in shanghai and the three provincial capitals has slowed down, which may be related to the "downgrading" of consumption in large cities due to weak income expectations. at the same time, the consumption growth rate in second- and third-tier cities around the central cities is relatively good, which effectively takes over the consumption spillover from the central cities, and is also related to the relatively good current manufacturing prospects. finally, the consumption and income data in rural areas are generally higher than those in cities. in addition to other factors, this may be related to the continuous innovation of rural cultural tourism in recent years.
(interns duan yunxin and he xiaohao also contributed to this article)
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xie qiuyi, researcher at the paper
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