Questions have been raised about how long growth momentum from a month-long consumption promotion campaign in five economically vital cities could last, with analysts pointing to income and job uncertainties that still haunt Chinese households.
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A series of events to promote domestic and foreign brands started on Sunday, and will run throughout November in Shanghai, Beijing, Guangzhou, Tianjin and Chongqing, according to the Ministry of Commerce, in an attempt to drive up spending on the tailwind of China’s Black Friday-alike shopping season.
The cities, which contributed 13 per cent of China’s gross domestic product last year, have reported some of the most notable tightening in spending in the past two years, despite being home to a large proportion of the middle class and wealthy population.
While retail sales in China grew by 3.3 per cent in the first three quarters of the year, the consumption gauge in Shanghai and Tianjin fell by over 3 per cent, while Beijing also saw a decline of 1.6 per cent.
Under the consumption campaign in November, local governments will distribute consumption vouchers, and encourage brands that have yet to open a store in an area to establish new stores.
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In Beijing, local governments and enterprises will jointly issue over 10 billion yuan (US$1.4 billion) in subsidies, while nearly 50 international brands, in sectors including fashion and beauty, are set to open their first stores in the city.