In the Chinese gogo years, young couples carrying huge bouquets of roses were a common sight during the Qixi Festival, a centuries-old celebration of love and loyalty.
People would flock to social media to show off brand new iPhones and Louis Vuitton bags given to them by their partners, and photos of dinners at fancy restaurants during the Chinese version of Valentine’s Day, which falls in July or August every year.
That was then China‘s economic growth was the envy of the world. This year’s festival was on Saturday, and it was a different story. People went online to complain about the lack of gifts and holiday cheer, citing a sluggish economy and a tough job market.
The hashtag “Consumption plummets on Chinese Valentine’s Day. Are young people unwilling to pay the love tax?” became the No. 1 trending topic on the Weibo platform on Saturday, drawing 200 million views.
“The Qixi Festival is not as robust as previous years. It almost feels deserted,” wrote one user.
Owners of several flower shops took to Xiaohongshu, another popular platform, to complain about the lack of customers, posting pictures of unsold roses in their shops. CNN was unable to independently confirm their claims.
Other reports recalled sadly that couples used to have money to spend when the world’s second-largest economy was doing well. China is currently plagued by a litany of problems from slow consumer spending to a ongoing real estate crisis and a increasing debt crisis.
Alfred Wu, associate professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy, says young people, who used to spend a lot of money during the Qixi period, are now struggling to find jobs.
“I think the overall sentiment is very bad and consumers are very conservative,” he said, adding that the negative sentiment has become “the overall pattern” and “not just one festival”.
The anecdotal decline in spending appears to be in line with the “weak consumption trend we have seen over the past two years,” said Yeap Jun Rong, chief market strategist at trading provider IG, adding that Chinese consumer confidence is “hovering around record lows.”
How China’s loved ones behave is a problem for global corporations — and the government in Beijing. In recent weeks, a number of Western multinationals, from cosmetics giant L’Oréal to carmaker Volkswagen, have sounded the alarm about weak demand in China amid a continuing lackluster consumer confidence.
A push from the government
The lackluster mood also has implications for the Chinese government’s efforts to encourage marriage as a way to address declining birth rates and an ageing population. A shrinking population is likely to be a drag on economic growth.
According to the Ministry of Civil Affairs, only 3.43 million couples will have married in the first half of 2024. That is half the number in the same period 10 years ago.
On Saturday, state broadcaster CCTV released a video of rare family photos of young Chinese leader Xi Jinping, his wife Peng Liyuan and their baby daughter to mark their marriage, which lasted more than three decades.
But the message was not convincing. People complained on social media that they could not start a family because they were in debt or had to work long hours.
“If people born after 1990 now have (tens of thousands of yuan) in debt, and ‘996007’ becomes the norm, where do people get the mood to date?” the Weibo user asked.
“996” and “007” refer to the notorious working hours demanded by some of China’s largest conglomerates. The former refers to employees who work hard from 9am to 9pm, six days a week. Some are in a “007” situation, meaning they work every day.
The general pessimism is visible in trade and other data. According to a CNN calculation based on official customs data, imports of gem-quality diamonds fell 28% in the first half of this year compared with the same period in 2023.
Diamond supplier De Beers said in its 2024 half-year report that “ongoing economic challenges” in China have delayed the expected recovery after a sharp decline in 2023.
And according to released data Last Friday, the State Administration of Foreign Exchange said China’s direct investment commitments, a measure of foreign direct investment in the country, fell by nearly $15 billion in the April-June quarter. That’s just the second time This has been happening since 1998, underscoring the country’s inability to curb capital flight.
Raise the alarm
Qixi, which has been celebrated for thousands of years, falls on the seventh day of the seventh month in the lunar calendar. (Most of the world uses the solar, or Gregorian, calendar.) According to legend, this is the one day each year that the mythical lovers Niulang, a herd of cows, and Zhinu, a weaver, meet on a heavenly bridge.
In previous years, it was a fertile opportunity for Chinese and Western companies to market their wares. But that has changed. Global CEOs can no longer count on China as a commercial pillar.
“The only part of the world where consumer confidence is still very low is China,” L’Oreal CEO Nicolas Hieronimus told analysts during an earnings report late last month.
He cited the weak labor market and real estate market problems as reasons for the malaise. The lower-than-expected growth in the global beauty sector this year is largely a result of low consumer confidence in China, he added.
Advertising agency WPP (WPP) said last week that second-quarter sales in China were down nearly a quarter from last year, and the outlook isn’t much better.
“I expect the second half in China to remain very challenging,” Chief Financial Officer Joanne Wilson added during an earnings call. “I expect (revenue) to be down double digits for the full year.”
Volkswagen and Mercedes were also downbeat in their assessment of the Chinese economy.
“I think everyone knows that since we came out of the Covid restrictions early last year, consumer confidence has not come back,” Mercedes Benz Group Chairman Ola Kaellenius told analysts on July 26. “We don’t know how long it will take, what it will take for Chinese consumers to get that confidence back.”
Angelica Chiara Yazbeck and Shawn Deng contributed reporting.
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