Mainland consumption still short of pre-pandemic levels

Mainland consumer sentiment has not yet returned to pre-pandemic levels as wage growth rebounded by an average of 6 percent, which is still below the 2019 level, said Christine Peng, head of Greater China Consumer Sector at UBS.

Due to the recurrent waves of Covid-19, the service sector has been slow to recover and consumption may not return to pre-pandemic levels until the second half of next year, she added.

However, she believes that consumption is still the main driver of China’s economy and will account for an even higher proportion of the economy in the future as China’s city cluster plan could drive consumption upgrade in lower-tier cities.

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