Qatar National Bank QNB/ continuing private consumption in China, supported by significant accumulation of savings, and increasingly directing policies towards promoting consumption, as well as fundamental reforms aimed at reducing the state of economic uncertainty facing families.
In his weekly report, Qatar National Bank, in its weekly report, considered the Chinese consumer for growth is much greater than what the analysts consider.
The report pointed out that consumer spending in China has been significantly slowed down in the second quarter of 2025, after a strong start at the beginning of the year. In recent months, growth has decreased by the real value to its lowest level since the beginning of the year. It should be noted that despite the new measures to stimulate consumption, the rate of savings of families has remained stable, indicating the difficulty of changing their established habits.
In fact, consumption rates for Chinese families have been considered the lost link in the country’s economic chain for a long time, and it is an issue that goes beyond periodic economic patterns.
The report said that despite the government’s declared efforts to activate the transformation from investment -based growth to services and consumption, analysts and policy makers indicate that the continued decrease in consumption is an obstacle to growth, especially in a country with a population of 1.4 billion people and is characterized by high levels of income.
The report showed the weak performance referred to it is justified, as Chinese consumers remained cautious amid waves of economic turmoil that included the pandemic, the correction process that has extended for a long time in the real estate market, and the inability to predict policies.
However, despite these facts, the report saw that there is a general misunderstanding of the size and importance of Chinese special consumption, noting that the percentage of consumption to the gross domestic product in China cannot be compared to those in rich economies with a highly paid consumption in the private sector, such as the United States, as they are not very different from the prevailing proportions in other advanced economies.
This applies in particular the Asian economies that depend on advanced manufacturing and export, such as Japan, South Korea, Taiwan and Singapore, countries that adopt an economic model similar to the economic model of China.
Moreover, the report showed the superiority of Chinese consumers in terms of growth dynamics, significantly over their peers even in the large emerging economies that are characterized by high growth rates in the BRICS group (Brazil, Russia, India, China, South Africa) and the MEST group (Mexico, Indonesia, South Korea and Turkey) over the past decade.
The Qatar National Bank / Three National Bank / Three presented major arguments to highlight the role of Chinese consumer in the next stage of growth in the country, the first of which was according to the Chinese People’s Bank, the central bank, personal deposits in the Chinese banking system increased from 11.8 trillion US dollars before the pandem The average range, if confidence in the future is more restored. This would contribute to the continued growth of consumption and the increase in the total share of special consumption in GDP.
However, the report saw that achieving a significant increase in consumer spending in China would not be easy. Families in China tend to follow a conservative approach in their financial affairs and prefer saving more in light of the limited social support system from the government. Nevertheless, only a slight change in the savings rate will be sufficient to make a significant impact on consumption and investment. This is expected to happen with the gradual implementation of plans to expand the social welfare system.
The second argument mentioned in the report was China’s endeavor to balance its growth model, away from the need for significant investments in infrastructure. While the focus has recently been greatly on accelerating advanced manufacturing – especially in sectors such as electric vehicles, batteries and semi -conductors – policy makers are equally explicit about the need to enhance family demand.
Beijing has developed plans to raise the share of consumption in GDP from 40 currently to 50 percent by 2035. This ambition is supported through social policies reforms, housing support programs, low -income cities, and family credit support, especially in the field of consumer financing. Instead of being temporary, these stimuli reflect a long -term political goal aimed at stabilizing growth by strengthening internal demand in a more sustainable manner.
In its third argument, the report indicated that the structural reforms in China will gradually form a families perspective of risk in China. The reforms targeting real estate in the country – mortgage controls and reducing developers’ debts – are dealing with the imbalances in the market. While this process has temporarily eased the activity, it gradually re -balances to families’ finances, which reduces the regular risks, and paves the way for the stability of consumption driven by confidence in the future.
At the same time, the report pointed to the contribution of these reforms combined in reducing the stereotype of the need for excessive precautionary savings, which reduces the severity of family consumption behavior.