However, improving household incomes and labor market conditions remains critical for sustaining consumer confidence.
China’s consumer confidence index rose slightly from 86.2 in November to 86.4 in December, hovering just above the November 2022 record low of 85.5. Recent government pledges could support a shift in sentiment and spending appetite. On February 10, Beijing announced plans to:
- Increase residents’ income and promote reasonable wage growth.
- Better fulfill housing and consumer spending needs.
- Place greater emphasis on boosting consumption.
Beyond these measures, unemployment remains another challenge. The youth unemployment rate has fallen from 18.8% in August 2024 to 16.1% in November 2024. However, this remains excessively high compared to a national unemployment rate of 5%.
Beijing could address this issue by incentivizing firms to hire young people or introducing labor reforms aimed at creating more opportunities for school leavers.
Global AI Race Heats Up as Hong Kong Eyes AI Expansion
The global AI race could be a potential source for job creation. On February 21, Beijing reaffirmed its commitment to expanding the tech sector, prioritizing support for tech firms.
Days after, on February 26, the Hong Kong government reportedly announced plans to establish an AI institute, earmarking HK$1 billion for the initiative. This move aligns with Beijing’s broader AI ambitions, particularly as Chinese AI firms like DeepSeek continue making inroads into the global market.
Expert Views on China’s Economic Outlook
Financial analysts view Beijing’s latest measures favorably. Brian Tycangco, editor and a