Beijing’s Consumer Collapse How Economic Strain and Tariff War Have Plunged China into a Spending Freeze Beijing’s consumer economy is facing a dramatic downturn, with scenes of shuttered shops and deserted malls replacing the once- vibrant commercial centers of the city. In the heart of Beijing’s Central Business District, entire floors in shopping malls are sitting empty, with many businesses having closed permanently or undergoing indefinite renovations. This collapse is not just limited to a few isolated spots—residents and vloggers alike report a widespread and ongoing commercial shutdown throughout the city. What was once considered a temporary economic setback due to the pandemic has now revealed itself as a long-term structural issue. A financial vlogger described the situation as a shift from luxury to survival, stating that people have moved from high-end consumption to what is now called “extremely low consumption.” Even those earning relatively stable monthly salaries are competing with delivery workers for ultra-cheap meals. Meanwhile, low-cost alternatives like Misha tea are booming, while traditional outlets like Starbucks see significant revenue decline. The consumer downgrade has extended across various sectors. The beauty and hair salon industry has contracted by 40%, replaced by a surge in 10-yuan haircut businesses. Retail luxury items like diamonds have seen a major collapse in demand, with prices falling sharply in both 2023 and 2024. Although gold and silver jewelry sales appeared to increase by 28.5% in March 2025, this rise is attributed entirely to soaring gold prices, not an increase in volume, indicating that even this sector is struggling beneath the surface. Official statistics released in April 2025 by Beijing’s Statistic Bureau confirmed the bleak outlook. March retail sales fell 9.9% year-on-year. Major consumer categories such as communication equipment, automobiles, cosmetics, and daily necessities all saw steep declines. Communication goods were down 38%, while car sales dropped 20%. Even sports and entertainment goods fell by nearly 18%, underscoring a broader reduction in discretionary spending. The restaurant industry, long a barometer of middle-class vitality, is also in crisis. Revenues declined by 3%, with many eateries closing altogether. Only food delivery services are managing to survive. One Beijing restaurant owner reported that after covering costs and wages, his yearly profit was a mere 7,400 yuan. Official figures showed profits for large-scale restaurants in Beijing had dropped by 88% in 2024. Ordinary residents have adapted to this harsh new economic climate with significant lifestyle changes. Families that used to enjoy weekend getaways and lavish social outings now opt for minimal-spending park picnics. Once-common business dinners have been replaced by group-buying discounts. Workplace entertaining, once central to client relations in finance and real estate, has nearly vanished due to tightening budgets and project stagnation. Even traditionally stable groups such as public servants, teachers, and employees of state-owned enterprises are cutting back. Although these groups have relatively secure incomes, their spending power no longer sustains the consumer market. A Beijing resident reported halving his spending and focusing only on food essentials, avoiding all luxury or leisure purchases. Government policies have exacerbated the decline. Under the leadership of former Beijing Party Secretary Tai Chi, many low-income populations were pushed out, damaging local consumption. Overregulation and extended COVID lockdowns further drained consumer confidence. Business closures, job losses, and reduced wages have compounded the problem. As a result, shopping malls, once symbols of prosperity, now stand largely empty. Foreign analysts have downgraded China’s economic outlook in response. UBS lowered its 2025 growth forecast to 3.4%, and Goldman Sachs revised its own figure to 4%. The tariff war with the United States has already inflicted serious damage, and an estimated 20 million people—around 3% of the workforce—are expected to be directly affected. China’s current model of economic growth, heavily reliant on exports and infrastructure investments, is coming under increasing criticism. At a recent event at the Institute of International Finance, U.S. Treasury Secretary Scott Bessent described China’s strategy as “unsustainable.” He emphasized the need for structural reform and a shift toward domestic consumption, noting that China’s household consumption accounts for less than 40% of GDP, compared to nearly 70% in the United States. The impact of the economic downturn is now so pervasive that even government systems are being strained. Funding for state security and surveillance has been reduced, with personnel facing delayed reimbursements. While high-level officials may remain insulated, the broader population is enduring growing hardship. Ultimately, the consumption slowdown in Beijing reflects deeper issues within China's economic and social framework. A lack of social security, high living costs, job insecurity, and declining trust in the future have all contributed to a dramatic drop in consumer confidence. Despite increasing calls for policy change, China continues to prioritize supply-side economics. Without a shift toward strengthening the consumer base and enhancing social protections, experts warn the nation's economic trajectory will remain grim.