In China, Lunar New Year ‘A Reminder of Future Uncertainty’: Analyst

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For generations, the Lunar New Year has been China’s most important spending season—a time when families splurge on lavish reunion dinners, new clothes, festive decorations, and gifts. Firecrackers, packed shopping malls, and bustling open-air markets are traditional signs of the holiday season.

This year, many of these signs appeared noticeably subdued.

From quieter markets in northern China to national economic data showing weak demand and rising household caution, this year’s holiday has offered a stark window into the country’s slowing consumer economy, according to an analyst.

“In the past, families would prepare eight to ten dishes for Lunar New Year’s Eve, symbolizing reunion and abundance,” he said.

Qi noted that people are cutting back on spending wherever they can when it comes to holiday celebrations.

The caution extends beyond dining tables. Qi said pre-holiday shopping crowds were thinner, and the customary rush to stock up on gifts, snacks, and new clothing had faded.

He described his own spending habits as dramatically reduced: “Before, I might spend 1,000 yuan [about $140] in a single day. Now, I might spend 1,000 yuan in a month.”

In addition to mortgages, car loans, and other debts weighing on households, he said, “Even during the New Year, I can’t feel happy.”

Qi’s experience aligns with broader economic indicators.

Official data from China’s National Bureau of Statistics show that the country’s Consumer Price Index rose by merely 0.2 percent in January, underscoring weak domestic demand. The Producer Price Index, a measure of wholesale prices, has remained in negative territory for more than three years, falling by 1.4 percent year over year in January—a sign of persistent deflationary pressure.

CASS researchers attribute the shift primarily to falling property prices and slower income growth. Many families prepaid mortgages at the start of the year and have become more conservative about borrowing. A state trade-in subsidy program worth 300 billion yuan (about $43 billion) has also lost momentum.

Despite a series of stimulus measures—including interest rate cuts, consumer vouchers, and relaxed credit conditions—retail sales in 2025 grew only by 3.7 percent, according to the National Bureau of Statistics, trailing the country’s 5 percent GDP growth rate.

Bank lending figures tell a similar story. Although January is typically a strong month for new loans, China’s central bank reported 4.71 trillion yuan in new loans this January, below both analyst expectations and last year’s total, according to Chinese state media. Overall, new bank lending in 2025 fell to a seven-year low.

While exports have helped prop up headline GDP growth, structural imbalances, ongoing trade tensions, and geopolitical uncertainty cloud the outlook.

Some analysts say the psychology of Chinese consumers has changed.

Bruno Lannes, a senior partner at Bain & Company in Shanghai, observed in December last year that in the decade before the COVID-19 pandemic, Chinese consumers were eager to pay for innovation and upgrades. Now, they are more rational and deliberate, with a clearer sense of what they truly need.

Qi sees that shift in everyday shopping behavior.

“In the past, people with better incomes shopped [online] on JD or even Amazon. Those with less money used [the cheaper] Taobao,” he said. “Now, many have moved to Pinduoduo,” an e-commerce platform known for deep discounts.

China current affairs commentator Li Linyi told The Epoch Times that for many ordinary Chinese people, this year’s Lunar New Year felt less festive and more calculated.

“When a holiday that once brought joy and relaxation instead serves as a reminder of future uncertainty,” he said, “the pullback in spending is no longer just an economic trend—it becomes a reflection of restraint and quiet pressure in everyday life.”