Dec 12, 2022 - Economy

China's vibe shift

Change in Index of Consumer Sentiment
Data: Morning Consult; Chart: Axios Visuals

The wave of dissatisfaction visible in the demonstrations across China in recent weeks is also showing up in polling data.

Why it matters: Chinese confidence during the pandemic was one of the big economic forces continuing to drive the global economy forward. Now it's slumping, and it's hard to see what can replace it.

State of play: Decision intelligence company Morning Consult tracks five different aspects of consumer confidence. All five of them have deteriorated markedly over the course of 2022. The overall five-day average is now 15% lower than it started the year, thanks in large part to worries over COVID-19.

  • By the numbers: In November, 70% of Chinese adults said the virus was a “major threat” to their country — up markedly from 52% in January.

The big picture: It's no surprise that consumer confidence is depressed in the U.S., after having been buffeted not only by the pandemic but also now by inflation, high-interest rates, and ubiquitous talk of a possible recession.

  • Optimism is similarly in very short supply in Europe, at least unless and until there's an end to the war in Ukraine.

The bottom line: While consumer confidence in China is low, it's not a lot lower than pre-pandemic. That means there's quite a lot further it could fall, should the pandemic start spreading out of control.

Go deeper