China consumer behavior changing — Alpho

MANILA, Philippines — Due both to economic slowdown and structural change, Chinese consumers show signs of changing behavior patterns. According to the Alpho analysis, it is probable that the number of Chinese tourists abroad will significantly decline together with the reduction of Chinese savings. That will cause a cut of capital flow to other countries – including South Asia, Middle East, Europe and the USA.

Based on International Monetary Fund (IMF) estimates, the Chinese economy is expected to shift to a trade deficit in the next two years. In spite of the fact that since 2001 China has been proud of its trade surplus,the trade figures have started to gradually decline after the financial crisis in 2008. Currently it’s moving close to zero.

The main reason for this evolution is probably a sharp increase in international tourism of Chinese residents thanks to the increasing wealth of the middle class. According to available sources, the volume of Chinese people travelling abroad increased from 42 million to 162 million between 2008 and 2018, representing a growth of around 252 percent. The consequence of this trend generated the deficit of $250 billion last year. This unfavorable development for the Chinese balance is signaling there can be a change, but one of the consequences is the decline in outgoing tourism.