Summary
The business and household experience in China is increasingly shaped by a property downturn that contrasts with pockets of strength in exports and technology investment, according to the account of ordinary residents and economists. While China’s leaders promote “high-quality growth” and domestic innovation, several owners and analysts said weak property prices have reduced consumer confidence and complicated household finances.
In Beijing, billiards hall owner Xiao Feng described a sharp squeeze on day-to-day demand. He said business is “very tough” because people have “not much disposable income,” adding that he is “just breaking even” after rent, labor and utilities. Xiao and his wife—described as a nurse—have a 10-year-old son, and he said her stable income has shifted the household’s reliance as his own income has fallen.
Xiao said he used to contribute about 100,000 yuan (about $14,250) annually to the household, but that he has had “no income for about six consecutive months now.” He also said he cut staff from eight to five as competition intensified. He said his family has begun drawing on savings as he navigates a weak demand environment.
A Beijing-based commercial property agent, Zhang Xiaoze, described an even broader contraction in activity. He said he once brought in up to 3 million yuan a year during the mid-2010s peak, but now earns about 100,000 yuan annually and faces an “extremely challenging” business environment. Zhang linked weak demand to relocation and spending restraint, saying “The fundamental issue is that people don’t have money,” and he said there are times when he must “dip into my savings” to support his family.
The pressure from property extends beyond small business receipts to household spending patterns, the report said, with employment and income uncertainty tied to weaker housing wealth. It also said the technology and AI push has not produced a direct “wealth effect” for most people, even as parts of the market have benefited—an outcome that economists said can help explain why official economic messaging does not feel persuasive to ordinary residents.
On one side, the report described China’s ruling Communist Party promoting Xi Jinping’s push for “high-quality growth” and domestic innovation, while shifting toward a consumption-driven growth model and high-tech industries. Exports, the report said, still support employment and overall growth, and it cited that in the first 11 months of the year Chinese exports totaled a record $3.4 trillion, offsetting a sharp drop in shipments to the United States compared with exports to Southeast Asia and Europe.
Lynn Song, chief economist for Greater China at ING, said China is in a “Great Transition” moving away from the growth engines that drove the past three decades. She also said the AI boom has supported share prices, but that investment inflows into the technology sector have not translated into broader wealth gains for most people—adding that it is “no surprise” that many feel the ground situation does not match the more optimistic growth picture.
On another side, economists cited by the report said official growth figures may overstate how fast the economy is actually slowing. It said Capital Economics economist Zichun Huang told of a divergence between official data and lived experience and said China’s actual growth “may be well below” what official numbers suggest. It also described consumption softness through recent data trends, including retail sales rising 1.3% in November year-on-year versus 2.9% in October, and fixed-asset investment falling 2.6% in the first 11 months of 2025.
HSBC economists, according to the report, said disposable household income growth has run below pre-pandemic pace in recent years and that “income gains from property have virtually vanished.” HSBC’s framing, paired with other forecasts cited in the report, underscored the continuing role property plays in household balance sheets and spending decisions.
The property slump is described as a central pain point because housing is portrayed as the main repository for household wealth. The report said housing prices have fallen 20% or more since they peaked in 2021, after a crackdown on excessive real estate borrowing triggered a debt crisis. It also cited China’s National Bureau of Statistics saying that in the first 11 months of the year, new home sales fell 11.2% by value year-on-year, while property investments fell nearly 16%.
Xiao said the downturn has directly affected his own finances. He said he bought an apartment in Beijing’s Tongzhou district in 2019 for more than 3 million yuan and that it is now worth about $342,000. He said he drives a 10-year-old car and has “no plans to replace it” in the current climate, and he said he scaled back spending on his son’s tutoring fees, shifting to home instruction and describing uncertainty about the economic outlook.
The report also included a Tianjin-based tutor, Zhou, who said his income dipped by more than a third as more parents stopped paying for tutoring. Zhou said parents were “unwilling to spend money on tutoring” and preferred “large group classes” over one-on-one tutoring, adding that he described business as about 50% worse than during the COVID period and said “The future looks bleak.”
Looking ahead, the report said most forecasts point to slower growth in 2026 and beyond, with Chinese leaders described as using incremental policies while postponing more fundamental reforms that might raise consumer confidence. It said economists pointed to excess supply in sectors including autos, steel and consumer goods, which can depress prices and profits, and to export price declines—along with trade frictions from a growing surplus that could trigger protectionist moves.
It also said that although an earlier potential trade confrontation with Washington was blunted after a truce between President Donald Trump and Chinese leader Xi Jinping, longer-term challenges remain. The report said the International Monetary Fund raised its China growth forecast from 4.8% to 5%, near the official target, and that banks including Goldman Sachs raised their estimates, while other forecasts varied widely—from Capital Economics’s 3% to 3.5% annual pace to the Rhodium Group’s 2.5% to 3%.
In a northern city, Shijiazhuang, the report quoted a budget hotel owner who gave only his surname, Zhai, as saying he did not see “an immediate rebound” and that he worried he would not be able to switch industries if conditions did not improve by the time his lease expires next May or June. For now, the report portrayed China’s economic story as a split between policy-boosted sectors and the strain that property weakness places on consumer spending, employment expectations and household financial planning.
AP’s Beijing newsroom contributed to this story.