As the Chinese Communist Party (CCP) intensifies calls to boost consumer spending, several China-based interviewees told The Epoch Times that weak incomes, job insecurity, and declining household wealth continue to weigh on consumption, exposing one of the country’s most persistent economic challenges.

They spoke to the publication on condition of anonymity or only publishing their surnames out of fear of reprisal.

An article published on June 18 by Qiushi, the CCP’s official theoretical journal, argued that consumption is the “ultimate demand” and plays a fundamental role in economic development. The unusually prominent discussion reflects growing official concern that weak domestic demand has become a major obstacle to economic recovery amid a prolonged slowdown.

The article cited recent economic data showing consumer spending remains under pressure. According to the data, retail sales growth weakened in May, underscoring concerns about sluggish demand despite months of stimulus efforts.

The article called for measures to expand employment, raise disposable incomes, improve the social welfare system, and develop new areas of consumer spending, including tourism, healthcare, elder care, and childcare services. It also urged the regime to stabilize the property market and maintain healthy capital markets, warning that falling asset prices could further damage consumer confidence.

‘How Can They Spend?’

However, for many business owners, the problem runs deeper than a lack of promotional campaigns or policy slogans.

A manager of a manufacturing company in Hangzhou, China, told The Epoch Times that a combination of external pressures and weak domestic demand has led many firms to scale back operations.

“Many companies are planning to reduce production or shut down parts of their business this year,” he said. “Outside of the technology sector, manufacturing is in very poor shape. Factories are closing, relocating, or downsizing. Many people have lost their jobs. Without income, how can they spend?”

The manager said many rural migrant workers who once flocked to Hangzhou for factory jobs have already left, while service-sector businesses have been hit particularly hard.

“Many brick-and-mortar stores simply can’t survive,” he said. “Shopping malls are much quieter than they used to be. People are cutting back wherever they can.”

Official data released by China’s National Bureau of Statistics on June 16 pointed to continuing weakness in domestic demand. Retail sales recorded their first decline since December 2022, while fixed-asset investment and property investment continued to soften.

The weakness in consumption has also affected business confidence.

A source from China’s small- and medium-sized enterprise sector in Jiangsu Province, surnamed Xu, told The Epoch Times that many private companies are increasingly concerned about shrinking room for survival.

“Businesses operate with long-term planning, but many smaller firms lack the capital and technology needed to adapt to the regime’s new priorities,” Xu said.

She noted that policy support has increasingly shifted toward sectors such as semiconductors, artificial intelligence, and robotics, while traditional manufacturers face mounting pressure to upgrade their operations.

“Traditional manufacturing hasn’t been abandoned entirely, but authorities no longer support low-end capacity expansion,” she said. “Companies are being pushed toward digitalization and green energy transformation. Most small businesses simply don’t have that kind of money. If they continue operating as before, they face inspections related to taxes, environmental compliance, energy use, and workplace safety. The feeling among many business owners is that if they don’t transform, they won’t survive.”

The CCP has repeatedly identified expanding domestic demand as a top economic priority. At the Central Economic Work Conference held late last year, the Party’s policymakers listed boosting consumption and improving investment efficiency among the regime’s key tasks.

Since then, local governments across China have rolled out consumer vouchers, trade-in subsidies, and tourism promotions. Retailers, appliance makers, automakers, and tourism operators have launched a steady stream of discounts and marketing campaigns.

Yet, the interviewees said such measures have done little to change household spending habits because income expectations remain weak while major expenses continue to rise.

A Chinese economics scholar, surnamed Sun, told The Epoch Times that weak consumption cannot be solved through short-term stimulus measures alone.

“The CCP is effectively acknowledging that insufficient consumption is affecting economic performance,” Sun said. “The problem is that consumption depends on income and expectations. Many families are still paying mortgages, and job security has deteriorated.”

He argued that growing uncertainty throughout the economy has undermined both business investment and household spending.

“Private companies don’t want to invest. Young people don’t want to get married or have children. Ordinary people don’t want to spend,” he said. “The CCP is calling for more consumption, but it is asking households to help solve economic problems that were created by the system itself.”

Households Pull Back 

For many consumers, declining asset values have become another major concern.

Qiushi’s article acknowledged the need to repair household balance sheets and stabilize both the housing and stock markets. Zhao, a resident of Jinan, China, told The Epoch Times that falling home prices, stock market volatility, and shrinking household wealth have significantly weakened consumer confidence.

“Most of our money goes toward groceries, mortgage payments, and our kid’s education,” Zhao said. “It’s not that people don’t want to spend. They’re afraid to. No one knows whether their company will start laying off workers tomorrow.”

She said many families have changed their spending habits over the past few years, postponing purchases and avoiding nonessential expenses.

“People used to assume their salary would keep coming every month,” she said. “Now housing prices are falling, jobs feel less secure, and many families are supporting both children and elderly parents. Under those circumstances, people think twice before spending.”

While Chinese state media continues to emphasize the importance of boosting consumption, the interviewees suggest that confidence remains difficult to restore. Companies worry about shrinking orders and regulatory pressures, while households remain focused on income stability, mortgage payments, and employment prospects.

Reuters and Wang Yibo contributed to this report.