Trade tensions between US and China as well as lowering demand of consumer products in Chinese market has led to fears of global economic decline, reports in the media indicate.
Chinese consumers have a reputations of being spenders – no matter the state of the global economy – and that helped offset global economic fears till date. However, it turns out that consumers in China are now spending less and less money and are in fact hunting for bargains and lowly priced consumables instead of pricey American products.
Apple iPhones are the latest example of that with the Tim Cook-headed company revealing its dismal outlook for the 2019’s first quarter. In a note to investors, Cook said that they are not expecting over the top revenue because of trade war tensions with China as well as decline in consumer demand.
Situation in China draws a similar picture with more and more consumer surveys indicating that people have started to look for bargains and replacement products for big brands. Slowly local brands are gaining a lot of traction and that’s why American companies are feeling the brunt.
Chinese consumer numbers aren’t declining, but Apple’s disappointing numbers in combination with declining car sales, faltering retail sales, a slumping property market, a tougher job market all signal that Chinese consumers may be losing their once unshakable confidence. The sagging confidence could undermine China’s efforts to redirect its economy and spur growth. The spending slowdown in China could be a worrying sign for many of America’s biggest companies, too, at a time when their profits and stock prices are under pressure.
Aidan Donaldson is a reporter for Finance Analyst. After graduating from University of Ottawa, Aidan got an internship at CTV News in Toronto and worked as a reporter and sound engineer. Adman has also worked as a reporter for Maclleans Magazine. Aidan covers entertainment and community events for Finance Analyst.