But this doesn't tackle the root of the problem, according to analysts at Trivium, a China-focused research firm. "Consumers aren't spending because income growth has slowed and the economic outlook remains uncertain," Trivium analysts wrote in a note. Several cities, including Zhengzhou in central China, have also relaxed purchasing rules to stimulate demand. This strategy, which China has used in the past, would technically make the cost of its goods more competitive abroad. Foreign direct investment in China fell to its lowest level since 1998 in the second quarter, according to Goldman Sachs.

Source: Economic Times August 13, 2023 00:49 UTC