China’s economic slowdown has had a significant impact on its domestic market.

Here are some key factors and their effects:

1. Sluggish Consumer Spending: As the economy slows down, consumers

tend to cut back on spending, leading to a decrease in domestic
consumption1. This can further exacerbate the economic slowdown as
consumption is a major component of GDP.
2. Shaky Property Market: The property market in China has been unstable,
with increasing risks of defaults in the real estate sector1. This has led to
decreased consumer confidence and reduced spending in related industries
such as construction and home appliances.
3. Flagging Exports: Trade tensions with the US and other countries have led
to a decrease in exports1. This has a direct impact on domestic
manufacturers who rely on export markets for their products.
4. Record Youth Unemployment: High unemployment rates, particularly
among young workers, lead to reduced consumer spending and can have
long-term impacts on economic growth2.
5. Towering Local Government Debt: High levels of local government debt
can lead to fiscal instability and reduce the government’s ability to stimulate
the economy through public spending1.
6. COVID-19 Pandemic: The strict zero-Covid policy led to a significant
decrease in offline consumption, particularly in the private sector and
smaller enterprises3. The mishandling of the Covid-19 pandemic,
particularly from March 2022, when Shanghai began its lockdown, led to a
crisis of confidence among private businesses and consumers3.

These factors are interconnected and can influence each other, contributing to the
overall slowdown of China’s economy.

Here is a literature review on the impact of various factors on China’s economy:

1. Sluggish Consumer Spending: The slowdown in China’s economy has led

to a decrease in consumer spending, which has further exacerbated the
economic slowdown1. A study by Deloitte found that in the aftermath of the
pandemic, consumers have become more pragmatic and rational in their
purchasing decisions1.
2. Shaky Property Market: The property market in China has been unstable,
leading to decreased consumer confidence and reduced spending in related
industries1. A study by Emerald Insight found that administrative factors are
one main factor that affects housing prices2.
3. Flagging Exports: Trade tensions with the US and other countries have led
to a decrease in exports1. A study by MDPI found that the COVID-19
pandemic and the trend of “anti-globalization” continuously impact
international trade3.
4. Record Youth Unemployment: High unemployment rates, particularly
among young workers, lead to reduced consumer spending and can have
long-term impacts on economic growth4. A report by Bloomberg highlighted
that youth unemployment hit a record 21.3% in June 20235.
5. Towering Local Government Debt: High levels of local government debt
can lead to fiscal instability and reduce the government’s ability to stimulate
the economy through public spending1. A study by MDPI found that when
the scale of local government debt exceeds a certain level, economic growth
will be suppressed by the crowding-out of private investment and the
reduction of public expenditure6.
6. COVID-19 Pandemic: The strict zero-Covid policy led to a significant
decrease in offline consumption, particularly in the private sector and
smaller enterprises7. A study published in PLOS ONE found that COVID-19
has a greater impact on China’s economy with short-term cyclicity, while
the impact cycle of the Global Financial Crisis is longer8.