COMMENTS / COLUMNISTS
Consumption rebound still uncertain, calls for early preparation
Published: Mar 04, 2020 07:45 PM

Photo: VCG

While many industries in China are expected to see customers rush to make up for lost time in spending once the coronavirus outbreak ends, a rapid recovery in domestic consumption may not come as easily as expected.

Take auto sales as an example. Some believe that after the epidemic, auto sales will climb and the market may even undergo a rebound similar to what happened after SARS hit China in 2003. Yet, experts warned the situation may not be that optimistic. 

"If the epidemic can be completely brought under control by the end of April, then based on experience, we will see a small peak in auto sales during the May Day holidays," Zhang Xiang, an auto expert with the Talent Exchange Center under the Ministry of Industry and Information Technology, was quoted by a chinanews.com report as saying. 

But it won't be anything like the explosive sales following SARS in 2003, according to Zhang. For starters, the Chinese economy was on a fast track in 2003, with a relatively low vehicle ownership rate and automobiles basically in short supply. However, the auto industry has been suffering from overcapacity in recent years. Second, Chinese people's auto consumption is inclined to be more rational, and impulse buying is less likely for this sector.

So we cannot be too optimistic about the extent to which Chinese vehicle consumption will recover once the epidemic ends, and that is true of many other industries. The Chinese economy is different from the past by many measures - economic cycle, asset prices, people's income expectations, industrial prosperity, and the impact of the virus on various sectors. Many factors could have an impact on the recovery of domestic consumption.

Instead of waiting for consumers to start shopping again, relevant authorities had better start preparing measures aimed at boosting private spending and restoring consumption confidence, which is crucial to China's economic revival in the next stage.

The author is a reporter with the Gloal Times. bizopinion@globaltimes.com.cn