China’s consumer mood in summer 2025 is mixed: spending is clearly recovering, but confidence remains subdued. The official Consumer Confidence Index (CCI) has stayed well below the neutral 100 mark (pre‑pandemic levels were around 120). In May 2025 it was roughly 88 points, showing households are still cautious and sitting on high savings. A second gauge, the Ipsos Primary Consumer Sentiment Index (PCSI), rose markedly to 71.33 points in July 2025 from 69.52 in June, signalling greater optimism about personal finances, although it too remains below neutral.
Signs of recovery
- Stronger retail momentum: In Q1 2025 retail sales grew 4.6 % year‑on‑year to RMB 12.47 trillion. Growth accelerated to 5.9 % in March, 5.1 % in April and 6.4 % in May—the fastest since late 2023—helped by holiday spending and a government‑subsidised “trade‑in” programme.
- Broad-based revival: While cities account for most consumption, rural retail sales grew 4.9 % in Q1, slightly faster than urban sales (+4.5 %). Per‑capita rural consumption rose 5.6 % versus 4.7 % in cities, suggesting smaller towns are catching up thanks to e‑commerce and logistics improvements.
- Services and durables rebound: Sales of sports and leisure goods jumped 25.4 %, while restaurant revenues grew 4.7 %. A government trade‑in scheme sparked surges in smartphones (+26.9 %) and home appliances (+19 %).
- Holiday spending boom: During the eight‑day Spring Festival, domestic trips hit 501 million (+5.9 % year‑on‑year), tourist spending totalled RMB 677 billion (+7 %) and cinemas took in a record RMB 10 billion—clear evidence that households are travelling and spending again.
Headwinds and risks
- Weak property market and deflation: Home prices fell at their sharpest pace in eight months, and many households feel poorer, making them reluctant to commit to big purchases.
- Income uncertainty: A McKinsey survey notes that while consumers expect consumption to rise slightly in 2025, expected household income growth has slowed to about 1.4 % (from 2.5 % in 2024) and 36 % report “job anxiety”. This dampens sentiment.
- June slowdown: In June retail sales growth fell back to 4.8 %, the lowest since the start of the year, and economists warn that the boost from subsidies may be fading. Analysts therefore expect more policy support in the second half of the year.
Overall picture
China’s consumption mood is in a cautious recovery. Data show households are spending more on both everyday goods and services, and targeted measures (tax breaks and trade‑in schemes) are working. Yet confidence is fragile: the official index remains below neutral, and structural headwinds such as the property slump, U.S. tariffs and uncertain incomes keep consumers on edge. The recovery is therefore uneven and risks losing momentum without further stimulus.